VC funding declines 40% YoY in October to $625 million
What's the story
In October 2023, the Indian start-up scene saw a significant decline in venture capital funding, with a nearly 40% drop compared to the previous year.
According to data from Venture Intelligence, start-ups managed to secure a total of $625 million in equity this month.
This decrease mainly impacted later-stage funding rounds, like Series B and beyond, making it tough for entrepreneurs to find investment.
Details
Major decline in VC investments this year
So far this year, start-ups have raised $6.5 billion in equity, compared to the $24.3 billion they raised in the entire year of 2022.
"If we compare how the situation was in 2022 to what it is now, soonicorn (soon-to-be unicorn) and unicorn stage companies continue to see tremendous pressure to justify their valuation," Sateesh Andra, Managing Director, Endiya Partners told Moneycontrol.
"They need to grow their revenues 2X to 3X to match their valuation," he added.
Insights
Early stage remains top priority
In October, some of the most active venture capital firms included Peak XV Partners, Rainmatter Capital, India Quotient, IFC, and Blume Ventures.
Many of these VCs invested their money into early-stage start-ups. For instance, Peak XV Partners, which traditionally concentrated on later-stage and growth-stage investments, has invested more in early-stage deals.
Several investors are also holding onto their cash and have taken a wait-and-watch approach. Many VC firms have announced launching new funds and closing their existing funds, too.