Karnataka’s tech start-up ecosystem witnessed a decline in funding in 2023 compared to the previous year, said a study by Tracxn Technologies, a data intelligence market research platform.
Tech start-ups in the State received a funding of $3.4 billion in 2023, a 72% plunge from the $12.2 billion raised in 2022, and an 83% decline from the $20.4 billion raised in 2021.
“This decline could be attributed to the prevailing macroeconomic conditions and geopolitical issues,’‘ said the report released by Tracxn here on Thursday. It further said: “The funding trends witnessed in Karnataka was similar to that of the global trends.”
In terms of city-wise funding in 2023, Bengaluru was the leader. Start-ups based in the city raised $3.4 billion in 2023, while those based in Hubballi raised $121,000.
At all ages
Early-stage funding in 2023 stood at $784 million in funding, a drop of 71% from the $2.7 billion raised during the previous year. Seed-stage funding fell 54% to $294 million from the $643 million raised in 2022. The calendar saw late stage investments also declining at 74% to $2.3 billion compared with $8.9 billion a year ago, according to the study.
On ticket size, the report found, only eight over $100 million funds happened in tech start-up space in 2023, as against 26 and 44 such rounds in 2022 and 2021, respectively. Further, no new unicorns emerged in this space in 2023, a sharp contrast from seven unicorns in 2022 and 18 in 2021.
Accel, Wellfound, and LetsVenture were the top investors in the State till date, according to Tracxn. We Founder Circle, Y Combinator, and 100X.VC were the top seed-stage investors, Accel, Lightspeed Venture Partners, and Kalaari Capital led early-stage funding while Footpath Ventures, Founders Circle Capital, and DST Global were the top late-stage investors.
