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Over the past three years, Indian tech firms have bagged a cumulative funding of over $70 billion, according to a NASSCOM– ZinnovReport. 

The joint report titled ‘Weathering The Challenges – The Indian Tech Startup Landscape Report 2023’ showcases India remaining resilient as the third-largest global tech startup ecosystem. 

Key findings reveal a notable surge in recent years, with over 950 tech startups founded in 2023 alone. Around 750 companies raised $6 billion in total, with seed-stage deals comprising 72% of total funding. 

Deeptech funding exceeded $500 million, but deal volumes dropped by 48%. Late-stage funding decreased due to valuation adjustments and a focus on profitability. Top challenges for startup founders included cash flow issues, funding availability, and low customer demand. 

“Despite facing global economic and regulatory challenges in 2023, Indian tech start-ups have prioritised the imperative of enhancing their business fundamentals, driving profitability and growth. Deeptech accounts for just 14% of this funding, and needs an exponential acceleration to build India’s deeptech ecosystem. The proliferation of tech start-ups in Tier-II and III cities marks the ecosystem’s resilience,” Debjani Ghosh, President at Nasscom. 

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The Nasscom-Zinnov survey revealed that around 60% of startup founders experienced a growth in revenue and profitability in 2023. Notably, a significant portion of unfunded tech startup founders foresee higher revenues in 2024 compared to their funded counterparts.

Moreover, deeptech is increasingly becoming mainstream, as Indian firms are now leveraging it to enhance organizational efficiency (59%), lower operational costs (52%), and automate internal operations.

According to the report, investments in deeptech will continue an upward trend in 2024.  With Gen AI acceleration, 70% of  start-up founders are currently using artificial Intelligence in their solutions. 

Despite widespread reports of layoffs in the 2023 startup sector, a survey of over 100 founders indicated that over 65% actively pursued moderate hiring during the year.

In 2023, the democratisation of technology has led Indian tech startups to extend their reach into Tier II and Tier III locations. Data shows that the share of tech startups emerging in these evolving hubs has surged to 40%. 

Over the past 12 months, sectors like automotive, industrial, and manufacturing recorded stability, with an increase in their share of funding compared to other sectors.