50% of investors surveyed by Redseer in June are positive the funding spring would return in the next 6-12 months, while 17% of respondents thought it would happen sooner. The rest believe it would be 12-18 months or more before the funding winter passes.
According to Redseer’s survey, the number of funding deals which dropped early in CY23 to 700-900 deals from 1,519 deals in CY22 is also expected to shoot back in CY24 to 1,000-1,200 deals.
Moreover, VCs today have more dry powder than ever, also signalling a positive outlook are the total number of deals this year, 90% of which are likely to be seed or early-stage deals similar in trend with what was seen since CY17, as per the survey.
Redseer’s Kanishka Mohan, believes that India’s startup ecosystem has matured rapidly in the last five years. The number of registered startups has grown 9X in the last four years, from about 10,000 startups in CY18 to about 90,000 startups in CY22. At the same time, the number of active investors has grown 2X from 400 investors in CY18 to about 900 investors as of FY22.
Apart from the doubling of investors at home, global sources of funding have also become more diversified than before. In all, the USA, EU, UAE, and Japan are the largest source of funding for Indian startups making up 5% of total global funding and 20% of total APAC funding.
Mohan said, “The expectation with funding patterns so far is that 2023 will revert to the long-term trends in line with the years CY17 to CY20, and hover between $12 to $15 Bn, beyond which it is expected to be bullish into CY24 and touch $15-20 Bn.”
Of the 1000+ startups evaluated by Redseer, 10 break-out themes stand out according to the partner at the strategy consulting firm. They include =BPC, -Health & Wellness, Diagnostics & Clinics, Gaming & App Studios, Personal Loans, CRO/CRM, Industrial eB2B, Insurtech, DevOps, and Finance. These sectors, Redseer projects will give rise to the next set of unicorns going further into the decade.