Venture capital (VC) funding for Indian startups dropped 71.5% to $4.9 billion in the first eight months of 2023 from $17.1 billion a year earlier, according to London-based data and analytics company GlobalData.

The number of VC funding deals fell 42% year-on-year (YoY) to 734.

“Apart from several macroeconomic challenges and geopolitical conditions grappling global VC funding landscape and making a dent in investor sentiments, Indian startup ecosystem is grappling with rising investor caution regarding startup valuations,” said Aurojyoti Bose, Lead Analyst at GlobalData.

However, subdued VC funding activity was a global phenomenon, with most key markets experiencing declining deal volume and value.

India accounted for 5.3% of the total VC funding deals announced globally during January-August 2023. Its share of the total disclosed funding value stood at 3.1%.

Some of the major deals were $250 million fundraising by PhysicsWallah, $200 million by Zepto, $200 million by PhonePe, $146 million by Veritas Finance, and $120 million KreditBee.

“In the evolving landscape of VC funding, adaptability and strategic valuation assessments are crucial for the sustainability of the Indian startup ecosystem,” Bose said.

While challenges persist, the resilience of these ventures, exemplified by notable funding deals, reaffirms the enduring potential of the Indian entrepreneurial spirit, he stated.

(Editing by Brinda Darasha;