The third quarter of the calendar year 2023 has become the least funded quarter in the last five years, Tracxn Geo Quarterly India Tech Report said on Wednesday, September 27. The quarter saw inflows of about $1.5 billion, which is a 30 percent drop from $2 billion in the previous quarter.
In an encouraging twist, the month-on-month (MoM) funding in India's tech startup ecosystem has seen a significant uptick of 91 percent from $376 million in August to $720 million in September.
"India continues to experience the effects of the funding winter. Following an increase in funding in Q4 2022, India Tech is seeing a decline in funding every quarter, with a third consecutive drop in funding in Q3 2023 making it the least funded quarter in 2023 and also the least funded quarter in the last five years," the report added.
Source: Tracxn Geo Quarterly India Tech Report
However, despite the lows, India still remains the fifth-highest funded country in July-September quarter, and also stands at the fourth place in total funding in 2023.
The report added that the country witnessed the addition of only two unicorns in Q3 — Zepto and Zyber 365.
The report mentions that only Perfios, Zepto, Ola Electric, Ather Energy, and Zyber 365 raised over $100 million in funding rounds. Bengaluru led the maximum total fundraise, followed by Mumbai and Noida.
Perfios has raised a total of $229 million in a Series D round led by Kedaara Capital valuing the company at over $900 million. Zepto raised $200 million in Series E round led by a StepStone Group and Nexus Venture Partners at a valuation of $1.4 billion. Ola Electric and Ather Energy have raised $140 million and $109 million respectively.
Enterprise applications, fintech, and transportation and logistics tech were the top-performing sectors in Q3 2023 in this space.
Source: Tracxn Geo Quarterly India Tech Report
Meanwhile, India's fintech sector witnessed 68 percent growth from the previous quarter due to wider and rapid adoption of Unified Payments Interface (UPI).
“Despite the decline in funding, India remains among the top-performing tech ecosystems globally. A promising sign in the report is the month-on-month funding growth, with an impressive 91 percent increase from $376 million in August 2023 to $720 million in September 2023," said Abhishek Goyal, Co-Founder of Tracxn.
(Edited by : Shoma Bhattacharjee)
First Published: Sept 27, 2023 6:17 PM IST
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