The startup funding graph has taken a southward turn recently. The latest figures reveal an 80.1% drop in funding year-over-year. The week from July 20 to 26 witnessed startups raised just $58.3 million. It is a stark contrast to the $293 million raised during the same period in 2023. The previous week’s total was $210.4 million. This means a decline of 72.3%.
The sharp downturn in funding reveals a significant shift in the investment climate. The funding was concentrated in just eight rounds this week. It was 28 rounds during the same week in 2023. The drop in indicates tightened investor sentiment. It reflects a cautious approach towards new investments.
The few bright spots included space startup Unimech Aerospace. It raised $30 million in a funding round. However, it was more than 50% of the total funding raised in the week. The funding was led by Steadview Capital, ValueQuest Scale Fund and Evolvence India.
Wealthtech startup Stable Money secured around $15 million in its Series A round led by RTP Capital in the week. The other investors were from Lightspeed India and Matrix Partners. Flexible workspace provider Incuspaze simultaneously secured $8 million in its first funding round led by India Inflection Opportunity Fund. Direct-to-consumer luggage brand Nasher Miles raised $4 million in a bridge round and mainly supported by Singularity Early Opportunities Fund, Narendra Rathi of SoftBank Vision Fund and Sulabh Arya of Goldman Sachs Growth Equity.
The significant drop highlights current challenges being faced with respect to investment landscape. Sectors like space technology and wealthtech have continued to attract interest of investors, but the overall funding environment has witnessed drastic decline in number of investment rounds. It seems this is the new reality of startups in India and tough funding climate can be witnessed further.