Venture capital (VC) and private equity (PE) funding for Indian startups in the artificial intelligence sector has seen a dramatic decrease with deal sizes shrinking, notwithstanding the buzz around the country's potential as a major AI hub. Data from research agency Traxcn, which tracks PE/VC investments, shows that total funding for AI startups in India, which started with a bang in 2022 at $599 million, dropped sharply in 2023 to $168.4 million - a decrease of over 71 per cent.
Foreign investment in India's start-ups has plummeted 72 per cent to $4.58 billion so far, from $16.2 billion during the same period last year.
The past few years have seen the first cycle of mergers and acquisitions, exits, and track-records being created.
In India, where it is tougher to do business, a start-up gets established by the Series-B stage, and it gets expensive for investors.
Venture capitalists are leveraging their experience to build something new.
Start-ups that did not have a business model and, hence, could not grow or attract new funding, are shutting shop.
The total staff strength - once 1,100 - is now under 200.
Second hand goods are catching up with customers on renown shopping websites.
