PE, VC investments in domestic companies drop to $27.9 bn in 2023

Investments by private equity (PE) and venture capital (VC) funds to homegrown companies declined to $27.9 billion across 697 transactions this year (as of December 20), compared to $47.62 billion across 1,364 deals in 2022, according to a new report.

2023 saw more money being pulled out from the country by private equity players, with overall exits reaching $19.34 billion from 248 companies, in comparison to 233 exits worth $18.45 billion in 2022, according to data from Venture Intelligence and industry body IVCA.

Meanwhile, venture capital funding for startups declined by 72 per cent this year compared to last year. The new-age companies in the country received $7.5 billion across all stages (as of December 15), compared with $25 billion last year, according to the data.

The fall in funding this year is chiefly attributed to slow late-stage deals (Series D and above), which more than halved to $3.5 billion from $11.70 billion in 2022.

The early-stage funding deals slowed down. The number of deals declined to almost half to 414 rounds from 871 rounds in the year-ago period, according to the report.

Growth-stage funding rounds dropped to $1.9 billion via 99 deals, compared with $6.84 billion from 230 deals in 2022.

Making a dent in India’s startup growth story, the country slipped to fourth position in the global ranking among the highest-funded geographies in 2023, as it recorded lowest funding in five years.

After grabbing the third spot globally in 2021 as well as in 2022, India ranked fourth behind the US, the UK and China this year, receiving only $7 billion in total funding (till December 5), according to recent data by global market intelligence platform Tracxn.

In the third quarter (Q3) this year, India even slipped to fifth position among the highest-funded countries — behind the US, the UK, China and France.