Weathering the challenges: The Indian Tech Start-up Landscape Report 2023

The report underlines how India's tech start-up ecosystem is handling global challenges but continues to focus on enhancing their business fundamentals. It also highlights how the use of deep technologies is becoming mainstream to improve business functions. A section on the outlook for 2024 based on survey feedback received from start-up founders is also covered in the report.

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Key Findings

Global slowdown hits the Indian tech start-up ecosystem 2023

Mirroring global trends, Indian tech start-ups witnessed substantial drops in a) Funding value that reached a total of ~USD 6 Bn, down 67% over last year
While this funding value drop was holistic across all start-up stages, late-stage investments bore the brunt with a 71% drop.
New startup creation also dropped by ~30% of last year’s level

Though 2023 was a difficult year, there are some silver linings visible

Start-ups increased focus on business fundamentals, ~60% start-up founders report an increase in revenue and profitability in 2023.
New start-ups are increasingly focused on DeepTech. 25% of the tech start-up founded in 2023 were leveraging DeepTech
Over 100+ Generative AI start-ups now active in India’s start-up ecosystem building horizonal and vertical applications.
With Generative AI acceleration, 70% of start-up founders are intending to embed Artificial Intelligence in their solutions.

The Indian tech startup ecosystem has robust fundamentals and retains its position as the 3rd largest technology start-up hub globally

When compared to other countries, India scores well on talent, policy and new startup creation.
Indian start-ups witness over 30% conversion rate scaled start-up post Series B funding which is amongst the highest globally. This reflects the maturity of the scaled-up startup ecosystem in the country.

The Indian tech start-up ecosystem expects improved performance in 2024

Focus on business fundamentals to become stronger. Over 60% of start-up founders expect to increase revenues next year.
While the global environment is uncertain, 46% of start-up founders expect a better funding environment in 2024. Late-stage investments may continue to lag.
Investments in deep tech continue with over two-thirds of the start-ups investing in AI to enhance their product capabilities and internal efficiencies.

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