Indian start-ups raise more funds than China for 2nd straight year

No new unicorns were created during the first six months of the year, against 19 unicorns in H1 2022 and six in H2 2022


Aryaman Gupta New Delhi

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India pulled ahead of China in terms of start-up funding for the second consecutive year in a row during the first half (H1) of 2023, where it raised $5.5 billion. India was the third ranked geography after the US and the UK, who raised $67.4 billion and $8.6 billion respectively, according to data from market intelligence platform Tracxn.

China took the fourth spot for the second consecutive year, raising just $4.6 billion in H1. The last time China was ahead of India in the first half of the year was back in H1 2021, where it ranked second behind the US, while India took the fourth spot.

Regardless, funding among Indian start-ups fell 72 per cent year-on-year (YoY) in H1 2023, compared to $19.7 billion in the year ago period. On a half-yearly basis, funding fell 24 per cent from $7.3 billion in H2 2022, as per Tracxn.  

“Despite India being one of the top-performing countries across the globe with respect to funding in the private sector, it is currently facing a deceleration in funding due to inflation and other macroeconomic factors,” said Neha Singh, co-founder, Tracxn.

“Nevertheless, India continues to be one of the fastest-growing economies. India's start-up ecosystem ranked third in terms of funding in 2022, and it moved up to second in Q1 2023, and there is a tremendous amount of growth potential,” she added.

No new unicorns were created during the first six months of the year, against 19 unicorns in H1 2022 and six in H2 2022.

“The lack of unicorns in the first half of the year is a dampener, but the addition of 60 companies to the soonicorn (soon-to-be-unicorn) club and the funding of 212 companies for the first time is a silver lining amidst the global headwinds,” said Abhishek Goyal, co-founder, Tracxn.

Despite these challenges, H1 2023 witnessed 14 funding rounds surpassing $100 million, marking a 17 per cent increase from H2 2022.

Goyal added that there has also been a revolution in Tier 2 and 3 cities with an increased rate in the number of start-ups being formed, which, he says, is fuelling the country’s economic growth. This has largely been due to increasing adoption of online payment platforms and the expanding internet penetration.


First Published: Jul 06 2023 | 11:09 PM IST

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