Foreign Investments Into Indian Startup Ecosystem Fall by 72% In 2023 So Far: Report
New Delhi: Foreign investments into the Indian startup ecosystem have fallen by 72% in 2023 so far, even as the environment for these businesses has become challenging amid rising interest rates and global economic conditions, Business Standard reported.
The investment by Tiger Global and Accel have fallen by 97% in 2023 so far, compared to the same period last year, the business daily reported, citing data from Tracxn, the market intelligence platform.
Sequoia is down 95%, Y Combinator 87%, and SoftBank 80%, it added.
In 2022, Indian startups raised $26.8 billion, of which $26 billion came from foreign investors.
So far this year, foreign investment in India’s startups has plummeted 72% to $4.58 billion. The startups had raised $16.2 billion during the same period last year. The number of deals also fell from 852 to 241.
Earlier this month, Mint reported that funding activity and deal volume for Indian startups worsened to a nine-year low in April.
Angel investments and venture capital funding in Indian startups stood at $381 million across 58 deals in April.
The newspaper, citing data collated by VCCEdge, said that this was the lowest figure since April 2014, when 50 deals worth $108 million were announced.
Nikkei Asia also reported that global asset managers are slashing their valuations of high-profile Indian startups in their portfolios.
Invesco and BlackRock cut their valuations of Byju's from $22 billion to $11.5 billion and of Swiggy from $10.7 billion to $5.5 billion. BlackRock reduced its investment value in Byju's by almost 50%, while Invesco marked down its investment in Swiggy by 23%, Mint reported.
Vanguard reduced ride-hailing startup Ola's valuation by about 35% to $4.8 billion, while financial services startup Pine Labs had its valuation cut 40% to $3.1 billion by Neuberger Berman. Janus Henderson halved health care startup PharmEasy's valuation to $2.8 billion, Nikkei Asia reported.
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