Investors staying away from startup companies, investment reached the lowest level in four years

The first half of the calendar year 2023 saw the lowest investment in startup companies during the last four years. Startups received only $3.8 billion (298 deals) in funding during this period. This is 36 percent less than the investment of $ 5.9 billion received in the second quarter of last year. Actually, investors are taking more time to investigate every aspect before investing money in startups, due to which the investment has declined.
In volume terms, early-stage deals accounted for 57 percent of total funding in H1, according to a Price Waterhouse Cooper (PwC) report. In value terms, early-stage deals contributed 16 percent of the total funding, but this figure was the lowest in the last two years.
According to the report, despite challenging funding market conditions during the last few quarters, investors have shown strong support for their portfolio companies by doubling their investments in companies showing positive growth.
As per the report, Bengaluru, NCR, and Mumbai continue to be the leading startup cities in India. These cities represent 83 percent of startup funding. The first half of the calendar year 2023 saw a decline in funding activity across all cities except Chennai, the report said. There is no dearth of money for venture capitalists (VCs), but there is a slowdown in startup funding, said Amit Navka, partner at PwC. VC firms active in India have raised fresh funds in the recent past. We can expect the pace of investment to pick up in the next few months.
On the basis of sector, SaaS, D2C, Fintech, E-commerce B2B and Auto tech companies continue to be the choice of investors. These sectors accounted for 89 percent of the total funding in the first half of the calendar year.