Venture capital (VC) funding was affected in India in 2023 both in volume and value, with the latter more impacted. While deal volume declined by 56.3 per cent year-on-year (YoY) during January-February 2023, the corresponding deal value declined by 80.8 per cent, according to GlobalData, a data and analytics company.

An analysis of GlobalData’s financial deals database shows that 169 venture capital (VC) funding deals were announced in India during the first two months of 2023 while their disclosed funding value stood at $1.4 billion.

Aurojyoti Bose, Lead Analyst at GlobalData, said, “The decline could be attributed to the prevailing investor cautiousness as the ripple effects of funding winter continue through 2023 amid recession fears and growing concerns over startup valuations in the country.”

India ranks among the top five markets globally for VC funding in terms of both volume and value during January-February 2023; it is also the second biggest market in the Asia-Pacific region after China.

The decline in VC funding in India during January-February 2023 was not only significant but also way more compared to peers, Bose added. 

For instance, the US, China, and the UK saw VC funding deal volume decline by 52.1 per cent, 29.1 per cent and 38.1 per cent, respectively, during January-February 2023 YoY, while the decline in value was 72.3 per cent, 52.2 per cent and 70.1 per cent, respectively.