Funding in Indian startups plunges 75% in Q1 2023, no new unicorn in 3 months

Indian startups raised a complete of $2.8 billion in funds in the primary quarter of 2023, an enormous 75 per cent decrease in comparison with the identical interval in the earlier yr ($11.9 billion), as rising inflation and rates of interest proceed to influence investments considerably amid a deepening funding winter, a report confirmed on Monday.

There have been no new unicorns created in the January-March interval, in contrast with 14 unicorns in Q1 2022, based on the report by Tracxn, a number one world market intelligence platform.

The funding volumes contracted as a result of discount in late-stage funding, which declined by 79 per cent in the primary quarter ($1.8 billion) in comparison with Q1 2022.

Early-stage rounds noticed funding of $844 million, a drop of 4 per cent in comparison with This autumn 2022 however a drop of 68 per cent in comparison with Q1 of 2022.

Moreover, seed funding rounds in Q1 2023 noticed funding of $153 million, a 16 per cent drop from This autumn 2022. Although funding has decreased YoY, the MoM comparability is extra promising as Indian startups noticed a big uptick of 54 per cent from $777 million in February 2023 to $1.2 billion in March 2023.

Late-stage rounds in Q1 of 2023 noticed funding of $1.8 billion, a decline of 79 per cent in comparison with Q1 of 2022 and a 23 per cent drop in comparison with This autumn final yr.

Decline at 21% in Q3

Total funding declined by 21 per cent in Q1 2023 as in comparison with This autumn 2022, the report talked about.

Although funding has decreased YoY, the month-on-month funding in the Indian startup ecosystem was a big uptick of 54 per cent from $777 million in February to $1.2 billion in March.

The quarter witnessed 9, greater than $100 million funding rounds with firms like PhonePe, Lenskart, Mintify, Insurance Dekho, FreshtoHome meals, TI Clean Mobility and KreditBee sourcing big-ticket offers.

PhonePe raised a complete of $650 million in a number of Series D rounds in Q1 of 2023, valuing the corporate at $12 billion.

Lenskart raised $500 million in Series J spherical led by a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) at a valuation of $4.5 billion, the Tracxn report talked about.

The main sectors in phrases of funding this quarter have been fintech, retail and enterprise functions.

The fintech section witnessed a funding development of 150 per cent in comparison with This autumn of 2022; nevertheless, this can be a drop of 51 per cent in comparison with Q1 2022.

In phrases of exits, the state of affairs has remained secure for acquisitions QoQ as 46 acquisitions happened in comparison with the 43 in This autumn 2022, the report stated.

(With inputs from IANS)