The funding winter in India appears to be turning harsh, going by the latest report of data and analytics company GlobalData. It revealed that 459 venture capital (VC) deals worth $3.4 billion were closed between January and May 2023. This is dismally low compared with the 851 deals worth $13.3 billion closed in the year-ago period.
Commenting on the funding scenario, Aurojyoti Bose, Lead Analyst at GlobalData, said, “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.”
Despite the decline, India continues to hold a leading position in the Asia-Pacific (APAC) region, the report stated. The country continues to hold 16.4 per cent of the share of the total number of VC deals announced in the APAC region during the January-May period this year while its share of the corresponding deal value stood at 13 per cent.
In addition, India also holds a strong standing among the top five markets globally, including China. Some of the notable VC funding deals announced include that of edtech unicorn Physics Wallah ($250 million), Walmart-backed PhonePe ($200 million) and fintech start-up KreditBee ($120 million).
In April, Business Today reported that the first quarter of the calendar year 2023 saw no new unicorns compared to the year-ago quarter in which 14 start-ups crossed the $1 billion valuation benchmark.
However, Bose concluded by saying that despite the somber mood in India’s funding landscape, India continues to show resilience reflecting the vast potential and attractiveness of the country's start-up ecosystem.
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