- Funds raised by startups fell sharply in H12023, across late-, early- and seed-stage startups.
- However, 212 companies raised funds for the first time during the period.
- EVs were the top-funded sector, raising as much as $774 million, followed by payments.
Indian startups raised $5.5 billion in the first half of 2023 — that’s a 72% drop from the same period last year.
The number of deals – at 536 – have also fallen to a third of what they were in H1 2022 – 1,586, according to a half yearly update by Tracxn.
Amidst the fall, the startups that retained investor interest are those from environment tech – where funding went up 7% sequentially (as compared to H2 2022), while experiencing a 25% drop year-on-year.
“The rise in this sector can be attributed to the growing electric vehicles (EVs) industry in the country, driven by rising EV adoption and favorable government policies promoting cleaner mobility,” the report said.
Funds raised by startups in H1 2023
| Funding Round | Amount raised | YoY change |
| Late-stage Rounds | $3.8 billion | -71% |
| Early-stage Rounds | $1.4 billion | -73% |
| Seed-stage Rounds | $315 million | -71% |
| Total Funding | $5.5 billion | -72% |
EVs were the top-funded sector, raising as much as $774 million, followed by the payments sector – which raised just as much at $773 million. The government’s efforts to establish a cashless economy has drawn investments into the sector.
Next on the list are edtech companies – while K-12 edtech companies raised $727 million, the test preparation tech sector raised $708 million.
In spite of the overall fall, India remains the third most-funded geography in H1 2023, after the US and the UK.
“The investment environment has seen a plunge in funding, but there is a revolution in Tier 2 and Tier 3 cities with an increased rate in the number of startups being formed, which is fuelling the country’s economic growth,” said Abhishek Goyal, co-founder of Tracxn.
No new companies became unicorns in H12023 but 60 companies joined the soonicorn club – consisting of companies that are set to become unicorns (startups with $1 billion valuation) soon. The startup space also saw 74 acquisitions during the period under review, while 212 companies received funds for the first time.
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