New Delhi: Funding for the Indian startups in the first quarter of the calendar year 2023 fell 75 per cent to $2.8 billion as compared to the same period in the previous year (year-on-year, o,r YoY), when it stood at $11.9 billion, a report by market intelligence platform Tracxn said on Tuesday.
The report titled ‘Tracxn Geo Quarterly Report: India Tech – Q1 2023’ stated that the drop in funding of startups can be attributed to rising inflation and interest rates impacting investments significantly.
The funding volumes contracted by 79 per cent in Q1 CY23 to $1.8 billion, as compared to the same quarter the previous year, due to the reduction in late-stage funding, Tracxn stated.
In early-stage rounds in the same quarter, the funding dropped 4 per cent to $844 million quarter-on-quarter (QoQ, or as compared to Q4 CY22), and 68 per cent YoY, the report stated.
The Tracxn report further added that seed funding rounds in the first quarter of 2023 saw funding of $153 million, a 16% drop QoQ.
While the funding for Indian startups decreased YoY, the month-on-month (MoM) saw a significant uptick of 54 per cent from $777 million in February to $1.2 billion in March.
The quarter witnessed nine $100 million funding rounds as PhonePe, Lenskart, Mintify, Insurance Dekho, FreshtoHome foods, TI Clean Mobility and KreditBee sourced big ticket deals.
PhonePe raised a total of $650 million in multiple Series D rounds in the first quarter, taking the company’s valuation to $12 billion, the report stated. Meanwhile, Lenskart raised $500 million in a Series J round led by a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) at a valuation of $4.5 billion, Tracxn added.
FinTech, Retail, and Enterprise Applications were the leading sectors in terms of funding, as the FinTech segment’s funding grew 150 per cent in the first quarter QoQ. However, year-on-year, the funding for fintech companies dropped by 51 per cent.
Meanwhile, the quarter did not witness the creation of any new Indian unicorn, however, in the same quarter the previous year, 14 unicorns emerged, Tracxn said.
Agencies