Bets from big global VC firms fall 80% in India in 2023 amid funding winter

• Investments from large foreign investors, like Accel, Peak XV Partners, Tiger Global, and Softbank, fell by as much as 80 per cent on average in 2023, amid the Indian startup ecosystem’s so-called funding winter.

Key highlights

• Regardless, many of them say they are very bullish on the Indian market and are looking to ramp up their investments this year.
• Over the past two years, these large global venture capital (VC) firms have seemingly been pulling out of the Indian market.
• This is especially alarming given that foreign investments make up a sizable chunk of overall funding in India.

Effects:

• With the funding winter in place, start-ups resort to measures which help them save their working capital, as the expectations of funding from investors are minimal.
• The advertisement expenses, capital expenditures and expansion plans are put to a halt in order to increase the sustainability of the firm.
• Only the expenditure essential to the survival of the firm is undertaken and all possible steps are put in place to ensure unnecessary expenses.

Prelims takeaway

• Venture capital
• Funding winter