Tracxn Geo Semi Annual Report: India Tech- H1 2023: A Comprehensive Analysis

Do you remember the first time you heard about the global startup boom? It was exhilarating, wasn't it? The very notion that a small idea could turn into a globally recognized entity was awe-inspiring. Now, imagine this happening in a country with a booming economy like India. But as we'll soon uncover, the journey hasn't been all smooth sailing.

Overview of Tracxn's Geo Semi Annual Report: India Tech- H1 2023

Tracxn, a renowned SaaS-based market intelligence platform, has recently published their semi-annual report on India Tech for the first half of 2023 (H1 2023). The findings are both intriguing and a call for retrospection.

Funding Trends in India

Let's take a step back and have a look at the funding trend in H1 2023. It amounted to $5.5 billion, marking a 24 percent decrease from H2 2022 ($7.3 billion) and a more dramatic 72 percent decrease from H1 2022. Also, the number of funding rounds took a hit, with a significant 43 percent decrease from H2 2022 (946 rounds) and a steep 66 percent decline from H1 2022 (1,586 rounds).

Commentary from Neha Singh, Co-Founder of Tracxn

Neha Singh, Co-Founder of Tracxn, provides some vital insights. She explains that despite India being one of the top-performing countries in private sector funding, the recent decline is due to inflation and other macroeconomic factors. Yet, she remains optimistic about India's potential for growth.

Funding by Stage

Now, if we delve into the funding by stage, we observe some compelling trends. Late-stage rounds in H1 2023 saw a decline of 71 percent from H1 2022, while early-stage rounds dropped by 44 percent from H2 2022 and 73 percent from H1 2022. Similarly, seed-stage rounds also experienced a downturn.

Noteworthy Funding Rounds

However, it's not all doom and gloom. H1 2023 witnessed 14 funding rounds exceeding $100 million, marking a 17 percent increase from H2 2022.

Top Performing Sectors

Despite the challenging funding scenario, three sectors stood out - Environment Tech, FinTech, and Retail.

Reasons for Growth in Top Sectors

The Environment Tech sector's growth can be attributed to the burgeoning Electric Vehicles (EVs) industry in the country. FinTech flourished owing to increased adoption of digital payments and greater internet penetration. The retail sector rode high on the wave of booming e-commerce, boosted by online payment platforms and expanding internet accessibility in Tier-2 and Tier-3 cities.

Unicorn and Acquisition Trends

While the report noted a decline in the number of new unicorns and acquisitions in H1 2023, there were some success stories.

IPO Success Stories in H1 2023

Companies like Robu Labs and Homesfy not only defied the odds but also successfully went public in this period.

Geographical Distribution of Funds

The funding scene was dominated by Bangalore, followed by Delhi NCR and Mumbai.

Top Investors in H1 2023

The top investors in H1 2023 included 100X.VC, IPV, and Accel, each demonstrating prowess in different investment stages.

Conclusion

The report by Tracxn presents a mixed bag of highs and lows for the Indian Tech sector in H1 2023. Despite facing a decline in funding, there is a sense of hope stemming from the success stories, the rise of certain sectors, and the optimistic view of industry experts.