Startup Funding Plunges by 75% Compared to Q1'22: Tracxn Report The report is the company's quarterly proprietary document that provides a detailed overview of the Indian startup ecosystem by delineating funding activities, investor exits through acquisitions and IPOs, and wider trends in the fundraising landscape
By Teena Jose
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Tracxn, a leading global market intelligence platform, has released its 'Tracxn Geo Quarterly Report: India Tech - Q1 2023.' The report is the company's quarterly proprietary document that provides a detailed overview of the Indian startup ecosystem by delineating funding activities, investor exits through acquisitions and IPOs, and wider trends in the fundraising landscape.
According to the report, in Q1 2023, Indian startups have raised a total of $2.8 billion in funds to date, which is 75% lower compared to the same period in the previous year ($11.9 billion). The drop in funding can be attributed to rising inflation and interest rates impacting investments significantly. Furthermore, funding volumes have been contracting due to the reduction in late-stage funding, which has declined by 79% in Q1'23 ($1.8 billion) compared to Q1'22.
The report furthermore revealed that this quarter has witnessed 9 $100 million+ funding rounds with companies like PhonePe, Lenskart, Mintify, Insurance Dekho, FreshtoHome foods, TI Clean Mobility and KreditBee sourcing big ticket deals. PhonePe has raised a total of $650 million in multiple Series D rounds in Q1 of 2023, valuing the company at $12 billion while Lenskart raised $500 million in Series J round led by a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) at a valuation of $4.5 billion. The leading sectors in terms of funding this quarter were fintech, retail and enterprise applications. The fintech segment witnessed a funding growth of 150% compared to Q4 of 2022; however this is a drop of 51% compared to Q1 2022. Also, the quarter did not lead to the creation of any new Indian unicorns, while Q1'22 saw 14 unicorns emerge. In terms of exits, the scenario has remained stable for acquisitions QoQ as 46 acquisitions took place compared to the 43 in Q4 '22.
Tracxn Technologies Ltd. is a data intelligence platform for private market research, tracking 1.4 million entities through 1805 feeds categorised across industries, sub-sectors, geographies and networks globally.
