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NEW DELHI — Making a dent in India’s startup growth story, the country slipped to fourth position in the global ranking among the highest-funded geographies in 2023, as it recorded lowest funding in five years.
After grabbing the third spot globally in 2021 as well as in 2022, India ranked fourth behind the US, the UK and China this year, receiving only $7 billion in total funding (till December 5), according to data compiled by global market intelligence platform Tracxn.
In the third quarter (Q3) this year, India even slipped to fifth position among the highest-funded countries -- behind the US, the UK, China and France.
Q3 2023 raised a total of $1.5 billion, which is a 30 per cent drop from Q2 2023 and a 54 per cent drop as compared to Q3 2022.
The last quarter (Q4) this year recorded the lowest funding of $957 million to date, marking it the lowest-funded quarter since Q3 2016.
"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 5 years,” the report showed.
Despite the declining funding inflow, India has maintained its position in top 5 geographies in terms of total funding this year.
For 2023, the funding declined across all stages, with late-stage funding dropping over 73 per cent, followed by early-stage funding (70 per cent) and seed-stage funding (60 per cent).
The decline is primarily due to the biggest drop in late-stage funding, by over 73 per cent to $4.2 billion in 2023 from $15.6 billion in 2022.
The number of $100 million+ rounds recorded were only 17, dropping by 69 per cent compared to last year, said the report.