New Delhi: In the first half (H1) of 2023, India’s venture capital (VC) landscape experienced a drastic downturn, with investments plunging by an alarming 79 per cent compared to last year. According to multiple reports, the impact was particularly bad in the sectors like edtech, enterprise tech and fintech.
According to data, total investments in H1 2023 amounted to $3.8 billion, starkly contrasting the robust $18.4 billion secured the last year. There is a 60 per cent decline in the number of deals, meanwhile plummeted to a mere 293, from 727 seen the previous year.
In the early-stage segment, funding value was recorded at $1.8 billion in 2022, which declined by 65 per cent to $624 million, while for growth-stage companies, it was $342 million, a 43 per cent decrease from the last year’s $602 million.
Growth private equity (PE) investments observed the abruptest fall. In this segment, the total investment amounted to $1.6 billion from the previous year’s $10.5 billion, an 84 per cent plunge. Venture Intelligence defines Growth PE as investments of less than $20 million from Seed to Series D in companies over 10 years old and institutional investments from Series E to F in companies of the same age.
With value falling 78.3 per cent to $1.1 billion in H1 2023 from $5.5 billion late-stage funding segment also experienced a considerable decline.
As per one of the data platforms, enterprise tech is taking the hardest hit among the most prominent sectors. Companies in this sector raised $671.7 million across 158 deals in the first six months, down 88 per cent from the previous year’s $5.5 billion and 96 per cent from the $18 billion raised in 2021.
Over the past few years, Fintech, one of the most active venture investing segments, saw a decline of 67 per cent, with start-ups raising $1.4 billion in H1 2023 against $4.3 billion in the previous year period. For comparison, the sector saw investments worth $17.5 billion in 2021.
Edtech, which is experiencing severe turbulence after the pandemic boom has waned, saw investments decline 52 per cent to just $886.5 million in the first six-month period from $1.8 billion in H1 2022 and an 88 per cent drop from $7.4 billion in H1 2021.
VC investments in the travel and hospitality tech sector fell by 66 per cent to $173 million from $511.8 million in H1 2022, while investments in the healthtech industry decreased 82 per cent to $139.4 million from $767.7.
