Venture capital (VC) funding was affected in India in 2023 both in volume and value. While deal volume declined by 42.9 per cent year-on-year (YoY) during January-July 2023, the corresponding disclosed deal value declined by 72.5 per cent, according to GlobalData, a data and analytics company.

An analysis of GlobalData’s financial deals database shows that 644 venture capital (VC) funding deals were announced in India during the first seven months of 2023 while their disclosed funding value stood at $4.4 billion. This is against 1,128 VC deals that were announced in the corresponding period last year, and the disclosed funding value stood at $16 billion.

This could attributed to broader economic uncertainties, which represents a challenging period for the country’s start-up ecosystem, said the data and analytics company.

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Aurojyoti Bose, Lead Analyst at GlobalData, said, “The start-up ecosystem in the country is currently facing challenges in raising capital due to dent in investor sentiment. The decline of VC funding value by close to one-fourth signals the turbulent times the country’s start-ups are going through due to increased investor cautiousness amid the prevailing macroeconomic challenges and uncertain market conditions.”

India ranks among the top five markets globally for VC funding in terms of both volume and value during January-July 2023; it is also the second biggest market in the Asia-Pacific region after China. India accounted for 5.1 per cent of the total number of VC deals announced globally during January-July 2023 while its share of the corresponding deal value stood at 3.1 per cent.

VC funding deal volume declined in the US, China by 37.4 per cent and 29.1 per cent and 16.5% per cent, respectively, during January-July 2023 YoY, while the decline in value was 50.6% per cent, and 28.6 per cent, respectively.