Investment in Indian startups March 2023: Late-stage funding boosted the overall deal value

The total funding for Indian startups in March 2023 stood at $1.14 billion ($1,148 million) across 102 rounds. The seed-round and entry-satge funding round, together, accounted for just 25% of the total investment raised by Indian startup during the last month of the fiscal 2022-23.

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Investment in Indian startups has started drying up since the second half of 2022, owing to massive layoffs and global economic uncertainty. However, Indian startup entrepreneurs took a sigh of relief last month as the total investment in Indian startups surpassed the $1 billion mark in March 2023, a noteworthy increase of 38% MoM. The growth is largely attributed to just two late-stage deals: funding in eyewear e-retailer Lenskart and Walmart-owned fintech PhonePe.

According to the latest data from Tracxn, the total funding for Indian startups in March 2023 stood at $1.14 billion ($1,148 million) across 102 rounds. That’s an impressive 38% increase from February month when only $832 million were raised by Indian startups across 89 rounds. On the flip side, this is a massive 74.4% YoY decline from a year-ago period when the startups raised a humongous $4.48 billion in March 2022 across 378 deals.

Via The Economic Times

Indian startups funding 2023:

The report highlights an intriguing development here; late-stage funding deals, which were substantially reduced in 2022, are again picked up by investors in March 2023. In fact, late-stage funding raised by startups accounted for 74.8% of the total funding raised last month, amounting to $858.7 million. This is even more than what companies raised in the month of February.

On the other hand, seed-stage funding rounds accounted for only 4.5% of the total investments raised by Indian startups in March 2023, totalling $51.7 million.

The funding trend in early-stage startups could be concerning. Early-stage investments in startups stood at $237.6 million, representing 20.7% of the total

Other main highlights: Indian startups raised the most funds

  • Chiratae Ventures was the most active VC in March, participating in three funding rounds for HealthPlix, SigTuple and BuyStars. Other most active VCs were Elevation and Sixth Sense Ventures, each participating in two rounds.
  • The late-stage funding was led by the Abu Dhabi Investment Authority (ADIA), which invested $500 million in Lenskart for a 10% stake. This financing round made the valuation of Lenskart $4.2 billion.
  • PhonePe, India’s most valuable fintech startup, has secured a $200 million investment from its parent company Walmart. The fund infusion was part of the company’s ongoing $1 billion financing round. Pre-money valuation for this $200 million deal puts PhonePe at $12 billion, exceeding Razorpay’s valuation of $7.5 billion.
  • Mintifi, a supply chain financing startup, has raised $110 million in a fresh round of funding that was led by Premji Invest and included other existing investors Norwest Venture Partners, Elevation Capital and International Finance Corp. Interestingly, almost 90% of the investment was raised by selling new shares, with the proceeds flowing to the corporation. The remaining 10%, meanwhile, was raised through secondary shares only to provide liquidity to employees and early investors.
  • CHARGE+ZONE, an electric vehicle charging infra platform, recently raised $54 million in a Series A1 funding round led by global impact investment management firm BlueOrchard Finance. The company is also planning to raise between $75 million and $100 million in equity as part of Series A2 during 2023-2024.
  • Kabira Mobility, an electric bike startup, secured $50 million in its Series A funding round from Qatar-based Al-Abdulla Group.

The latest trends in funding in Indian startups have a lot many indicators for entrepreneurs, especially young ones who are either planning to start or have just started their ventures. The mass layoffs have bought the world to the doors of another recession, and if we pay attention to warnings put up by a few renowned leaders and investors, we must buckle up for the longest recession ever. In such a situation, it would be early-stage startups that may be impacted the most and possibly have a bumpy road ahead.

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