"If winter comes, can spring be far behind?” - Percy Bysshe Shelley
It seems like the saying of Shelley is getting true for the Indian start-up ecosystem, which recently went through a funding freeze. One of the recent examples is the office commute platform MoveInSync.
In its Series C funding, the company raised $15 million. It started getting term sheets from investors within a week after the deal was launched.
While investment in start-ups has remained steady, funding for companies in the growth stage has significantly slowed down.
Acording to the 'Annual Report: India Tech 2023' released by the data intelligence platform Tracxn, Indian start-ups have experienced a significant decline of 72 per cent, generating only $7 billion in funding so far this year. This marks a sharp decrease from the $25 billion raised in the previous year.
The report noted that funding had decreased across all stages, with late-stage funding experiencing a drop of over 73 per cent, followed by early-stage funding at 70 per cent, and seed-stage funding at 60 per cent.
However, now there has been a resurgence in Series A and B funding rounds. There has also been renewed interest from investors, as per a report by the Mint. Food-tech Platform Ghost Kitchens India raised $5 million in a Series A funding in a mix of equity and debt. Healthcare start-up Cardiotrack received $2 million in pre-series-A funding.
The Series B funding also saw companies such as Chennai-based start-up Aquaconnect raise $4 million in its Pre-Series B funding round, which was led by S2G Ventures.
Several other start-ups sealed top deals, including Credit Saison, which secured $144 million in Series D funding; Shadowfax, which raised $100 million in Series E funding; EV company River, which secured a $40 million investment; and more, as per data from Tracxn.
Similarly, in February, deals worth $835 million were signed, which was double what was signed in January ($443 million). This represents an overall trust in the entire start-up ecosystem.
"India is emerging as a strong force in the Web 3 space with more than 450+ start-ups. This reinforces the fact that the potential of Indian startups and talent pool continues to be strong and is only going to grow further in the years to come," said Rahul Pagidipati, CEO, ZebPay to The Financial Express.
The funding winter for start-ups was tough. Venture capital funding dropped sharply in 2023, with a 63 per cent decrease to $7.8 billion globally. This represents a reduction of 42 per cent compared to 2022 and is 62 per cent lower than the peak of $648.6 billion in 2021.
With several fundings, it seems like start-ups can hope for the near future. However, factors such as volatility of market, investors sentiment and stage of the development of the company will continue to impact the fundings.
