The venture capital (VC) funding activity in India seems to be still reeling from the funding drought that began in 2022. Despite significant entrepreneurial activity, the disclosed funding value of VC deals in the country suffered a massive year-on-year (YoY) 74% drop to $2.4 billion during the first quarter (Q1) of 2023, reveals GlobalData.
An analysis of GlobalData’s Financial Deals Database reveals that VC deals volume too witnessed a 48.7% decline YoY to 287 in Q1 2023.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The Indian startup ecosystem is yet to come out of the funding winter that started in 2022 with recession fears looming large in 2023. While India suffered significant setback in terms of both deal volume and value, the impact being more prominent in value terms suggests the growing investor cautiousness for committing big investments amid the unfavorable market conditions.”
However, market conditions have remained volatile globally with several other markets also experiencing subdued VC funding activity. Despite the decline, India continues to be a key APAC market for VC funding and stands next only to China in terms of both VC deals volume and value. It also remains one of the top five global markets for VC funding activity.
India accounted for 5.3% of the number of VC deals announced globally during Q1 2023 while its share of the corresponding deal value stood at 3.6%.
Some of the notable VC funding deals announced in India during Q1 2023 include $250 million fundraising by Physicswallah, $200 million funding secured by PhonePe and $120 million fundraising by KreditBee.