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Startup Trends that Shaped 2023



Did you know that India ranks 3rd globally in the startup ecosystems? Startups are the backbone of our economy and the largest contributor to our GDP. Startups are responsible for innovation and for creating 1 million jobs directly. As of October, India is home to 111 unicorns with a valuation of $340 billion approx. Meanwhile, 2021, 2020, and 2019 saw the birth of a maximum number of unicorns, 45, 11, and 7 respectively.


2023 has been one of the darker years for the startup ecosystem as it is experiencing a funding winter. Funding winter refers to an extended period where there is a scarcity of funds raised as private equity funds and venture capitalists hold back from investing in new startups, back off from deals, and might even hold back from releasing funds they promised to their targetted startups.

Indian startups have raised only $7 billion in Q1 to Q3 as compared to $22 billion in 2022. The reasons behind the funding slowdown are governance issues, the inability of the majority of startups to make profits, layoffs, shutdowns and the tailwinds emerging from global economic tensions resulting in funding meltdowns and investor pessimism.


Many unicorns like Swiggy, BYJU’s, Meesho, and Pharmeasy are going through it. They have been on the receiving end of substantial valuation cuts, forcing some of them to resort to layoffs, shutdown, or get acquired. As of now, we have only seen three startups emerging as a unicorn as compared to 21 unicorns in 2022. (Unicorns are those startups that reach $1 billion in valuation).


Now let's look at the list of top invested Startups & Industries:


  1. SaaS - Contributed to 30% of the total funding activity during H1 CY23. Builder.ai came out on top and raised more than USD 100 million during H1 CY23.

  2. D2C - Witnessed more deals in the later stage deals in H1 CY23. Lenskart and FreshToHome raised a significant amount of USD 100 million.

  3. FinTech - Witnessed a decline in the funding value raised in H1 CY23 by 50% compared to H2 CY22. About 64% of the funding received by this sector was driven by InsuranceDekho, KreditBee, and Mintifit.

  4. E-commerce (B2B) - The funding received by this sector during H1CY23 was driven by Zetwerk and Infra.Market which contributed to 84% of the total funding received.

  5. EdTech - Growth stage startups like Byjus and UpGrad raised significant funds accounting to more than USD 200 million each in H2 CY22.

  6. Online Gaming - Key companies that raised funds include Mayhem Studios, and Rooter contributing 73% of the total funding raised by this sector.

  7. FoodTech - Curefoods raised $37 million during H1 CY23. The funding in this sector increased by 4 times in H1 CY23 as compared to H2 CY22.

These were some trends and insights we witnessed in 2023. D2C, SaaS, FinTech, E-commerce, EdTech, FoodTech, and Online Gaming were some of the sectors that gained a lot of traction and funding in 2023. Despite this year having a rocky start, the investor confidence has been at an all-time high since the last few years. And, there’s hope that this funding winter will end soon.




(Author: Karishma Chandnani is a Content Writer at TechDoQuest. She offers a refreshing & youthful perspective on the topics she writes about).






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