With funding on the decline, Indian tech startups prepare for a tough 2024

In 2023, funding for Indian startups has plummeted to a five-year low, with a cumulative influx of $7 billion into the ecosystem. The prolonged funding winter has resulted in a consistent decline in venture capital investments since mid-2022, with each subsequent quarter experiencing a decline. 

The third quarter of 2023 stands out as the worst in five years, reflecting the challenges faced by the Indian startup landscape. During the period between July and September, startups in India secured a total of $1.5 billion across 166 funding rounds, marking a notable 30% decrease from the preceding quarter.

And, with just about $957 million raised in October and November, Q4 2023 is headed to be the lowest-funded quarter since Q3 2016. Q4 will be the worst quarter in 7 years.  

What’s to be noted is that funding has declined across all stages — about 60-70% in early and seed-stages as well.

However, as we exit 2023, there is a silver lining. Despite the overall funding slowdown, we have seen sectors such as AI, Deeptech, Environment, Climate, and SpaceTech garner investor attention, especially SpaceTech, which has had its best year ever, raising over $120 million in 2023 — skyrocketing on the privatization push from the government.