Indian startups witness 75% year-on-year drop in March quarter funding: Report

New Delhi, Apr 8 (KNN) The Indian start-ups are staring at a grave fund crunch as the total equity funding in the tech space plummeted to over 75 per cent in first quarter of 2023 as compared to same period last year, According to market intelligence platform Tracxn.

According to the report, the total equity funding in the tech space was USD 2.8 billion in the first quarter of 2023 (Jan-March), which plummeted more than 75 per cent as compared to USD 12.1 billion in the same quarter in 2022. 

The Indian startup ecosystem continues to see a funding crunch due to  uncertainties brought on by rising inflation, regulatory changes, funding winter, increasing international interest rates, the looming recession in the West, and the conflict in Europe.

The number of total equity funding rounds decreased by 63 per cent YoY to 298 in Q12023 from 808 in Q12022. 

The sector that raised the most money in Q12023 was B2C (business to customer) e-commerce sector. The companies in this sector raised USD 2.7 billion and sectors like payments, fashion tech, internet, and B2C fashion e-commerce followed the trend. 

However, the report pointed out that last year in the same quarter, the maximum funding round was led by SaaS companies (software as a service) and enterprise software companies which had an equal amount of funding worth USD2.4 billion each. 

Meanwhile, marketplace businesses raised USD 2.4 billion in the first three months of last year, making it the second top industry.

The B2C e-commerce companies include Amazon, Flipkart, FirstCry, Paytm Mall, Myntra, Snapdeal, 1mg, Pepperfry, BookMyShow, and Nykaa among many others.

While investors wait for values to rationalise, experts in the industry anticipate that the slowdown will persist, at least in the short term, reported ZEE News.  (KNN Bureau)