In 2023, investments from private equity (PE) and venture capital (VC) funds in Indian companies witnessed a decline, with a total of $27.9 billion across 697 transactions compared to $47.62 billion in 2022 across 1,364 deals, as per a recent report collated by Venture Intelligence and IVCA, an industry body.
Interestingly, this year saw a notable increase in capital being withdrawn from the country by private equity players, totaling $19.34 billion from 248 companies. In comparison, 2022 witnessed 233 exits worth $18.45 billion.
Venture capital funding for startups experienced a significant decline, with a staggering 72 per cent decrease compared to the previous year. Startups in India secured $7.5 billion across all stages by December 15, a notable drop from $25 billion in the preceding year.
This decline is largely attributed to a slowdown in late-stage deals, particularly Series D and above, which decreased to $3.5 billion from $11.70 billion in 2022. The number of early-stage funding deals also reduced significantly, nearly halving from 871 rounds to 414 rounds during this period.
Furthermore, growth-stage funding rounds amounted to $1.9 billion across 99 deals, a considerable drop from $6.84 billion in 2022 involving 230 deals.
India, previously a significant contender in the global startup landscape, slipped to the fourth position among the highest-funded geographies in 2023. With a total funding of only $7 billion by December 5, the country recorded its lowest funding in five years. Previously ranking third globally in both 2021 and 2022, India now falls behind the US, the UK, and China.
The downward trend continued in the third quarter of the year, as India dropped to the fifth position among the highest-funded countries, lagging behind the US, the UK, China, and France in terms of venture capital influx.
(With Agency Inputs)
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