Despite the decrease in funding in India, AI startups worldwide have done well, raising $50 billion in 2023, up from $45.8 billion in 2022. In the first quarter of 2024, total AI funding stood at $12.2 billion. Meanwhile, funding among Indian fintech startups surged 59% quarter-on-quarter to $551 million in the first quarter of 2024, but on a year-on-year basis, the funding was down 57% from the $1.3 billion raised in the same period the previous year.
Key takeaways:
- Indian startups in the AI sector are experiencing a significant drop in venture capital and private equity funding, with total funding falling from $599 million in 2022 to $168.4 million in 2023, and only $31.9 million raised in the first three rounds of 2024.
- Despite the decrease in funding in India, AI startups globally have seen an increase in funding, with $50 billion raised in 2023, up from $45.8 billion in 2022, and $12.2 billion in the first quarter of 2024.
- The average deal size for AI startups in India is also shrinking, from $14.7 million in 2022 to $7.1 million in 2023, with a slight increase to $10.6 million in 2024.
- Despite the overall decrease in funding, Indian fintech startups saw a 59% increase in funding to $551 million in the first quarter of 2024, up from $346 million in the previous quarter, although this is still down 57% from the $1.3 billion raised in the same period the previous year.