Slowdown in funding
Adaptability to pivot quickly
Start-ups need to demonstrate traction
The Indian Start-ups witnessed slowdown in funding and investments and many investors VC’s withdrawing funding and start up are at receiving end. The atmosphere brings in fear and adaptability is a must to be able to pivot quickly.
As traditional business faced lot of challenges during pandemic, we saw the rise of start-ups promising a shift towards digital based solutions that yielded huge funding.
This first quarter of 2024, out of $1.6 billion in funding, Shadowfax and Credit Saison received the highest funding of over $100 million, with Capillary, Rentomojo, and Captain Fresh also being among the top funded companies.
Slow Down in First Quarter
According to a report by market intelligence platform Tracxn, late-stage funding has seen the biggest drop this quarter, dropping by over 46% to $0.67 billion in Q1 2024 from $1.25 billion raised in Q4 2023 and dropping by 48% compared to $1.3 billion raised in the same period in Q1 2023.
Early-stage funding witnessed an increase of 28% and emergence of two new unicorns—Perfios and Ola Krutrim.
Additionally, IPO numbers surged, with eight tech companies going public, including MediaAssist, WTI, Exicom, and LawSikho. In first quarter of 2023, only two companies went public.
Key Reason behind Slowdown in Funding
We have to understand that the funding environment for startups has changed drastically and scaling the business is utmost important.
If a venture investment has to grow for entrepreneurial financing, real traction to validate the business models, founders spoke of is as equally important for sustainable growth and less on speculation.
Present day getting financed are equally tough and easy based on validating the correct business model. Shifting strategy has been model for big giants whenever slow down happened or any business anticipated about upcoming change.
The need of the hour is that founders have to demonstrate the adaptability of their business model, in light of both success and failure as quickly one adapts the ability to blend in current scenario and as per market demands.
Start-Ups that can scale on AI and no-code platforms can be on top of their game as these technologies enable rapid prototyping and market validation.
