The Indian startup ecosystem reported the lowest six-month funding in the last four years in the first half of 2023 at $3.8 billion across 298 deals. A decline of nearly 36 percent as compared to the second half of 2022 which was at $5.9 billion.

Amit Nawka, India Startups Leader at PwC India in an interview with CNBC-TV18 said investors have been reluctant to back high-burn businesses which are exposed to funding cycles.

"What is impacting the overall startup funding environment today is the investor sentiment or the perception of an overheated market. Investors have been reluctant to back high-burn businesses which are exposed to funding cycles," Nawka said.

As per a PwC India report, fintech, SaaS and D2C continued to be the most funded sectors in the first half of 2023. The report highlights that growth and late-stage deals accounted for 84 percent of funding activity.

The report states that India saw 80 mergers and acquisitions (M&A) transactions in the first half of 2023 with funding remaining the same as it was in the second half of 2022.

Nawka believes that if Indian startups are able to deliver profits in the next 12 months then there could be a bumper funding growth. While Bengaluru, NCR, and Mumbai represent 83 percent of total funding activity, Chennai and Hyderabad are fast emerging as startup hubs, Nawka added.

Also, watch Sameer Nigam, CEO of PhonePe discuss the road ahead of digital payments in India. PhonePe has recently introduced a Point-of-sale (POS) device, which allows merchants to conveniently accept payments using Debit Cards, Credit Cards, and UPI.

The device comes preloaded with the PhonePe POS App and supports transactions through tap/swipe/dip and interoperable dynamic QR codes. According to Nigam, the company plans to deploy 1.5 lakh POS devices by next year.

Moreover, Recur Club launched a sustainable finance program called "Regreen Fund" to invest in startups actively working towards a greener and more sustainable future.

Eklavya Gupta, co-founder and CEO of Recur Club said the fund will have an initial commitment of $10 million and will provide selected companies with access to growth capital without equity dilution, enabling them to scale their operations, accelerate product development, and expand their market reach.

Watch the video for more.

First Published:Jul 10, 2023 11:23 PM IST