India’s venture capital (VC) funding has experienced a significant decline in deal volume and funding value in 2023, according to a report by GlobalData, a data and analytics firm. The report revealed that India experienced a YoY drop of 46.1% in deal volume and a 74.6% decline in funding value, with only 459 VC funding deals worth $3.4 billion announced in the first five months of 2023, compared to 851 deals worth $13.3 billion in the same period last year.
The massive decline in funding value reflects the magnitude of the impact that the funding winter had on India. With macroeconomic challenges, mounting recession fears, and ongoing geopolitical tensions still prevalent, it seems to be a prolonged and harsh funding winter for the country, said Aurojyoti Bose, Lead Analyst at GlobalData.
However, despite the challenging climate, India remains a key Asia-Pacific market for VC funding activity, holding a 16.4% share of the total number of VC deals announced in the APAC region from January to May 2023, and ranking next to China in terms of deal volume and value. India also holds a 5% share of the total number of VC deals announced globally from January to May 2023, with its share of the corresponding deal value standing at 3.2%.
Prominent VC funding deals during this period included fundraising valued at around $250 million by PhysicsWallah, $200 million secured by PhonePe, and $120 million worth of fundraising by KreditBee.
Commenting on India’s resilience, Bose noted that while the funding winter experienced by the country’s venture capital landscape in early 2023 has undoubtedly been severe, it remains a resilient and promising market both regionally and globally.
Despite India’s challenging VC landscape, the country remains a significant market for VC funding activity. As the country navigates through these testing times, the Indian VC industry is poised to bounce back with renewed vigor and strength.
