Funding for Indian AI Startups Sees Sharp Decline in 2023: Report

Indian AI startups witness a 71% funding decline in 2023, totaling $168.4 million.

  • Indian AI startups witness a 71% funding decline in 2023, totaling $168.4 million.
  • Global AI startup funding reaches $50 billion in 2023, contrasting with Indian trends.
  • Despite challenges, success stories like Krutim and Sarvam AI highlight resilience in the Indian AI ecosystem.

Indian AI startups face a challenging funding landscape as venture capital and private equity investments in the sector witness a sharp decline in 2023, according to a report by research agency Traxcn. The total funding for Indian AI startups saw a staggering dip of over 71%, plummeting from $599 million in 2022 to $168.4 million in 2023. This decline reflects the growing struggle of Indian startups to secure substantial funding amidst tightening investor sentiment and shrinking deal sizes.

Despite the global surge in AI startup funding, with worldwide investments reaching $50 billion in 2023, Indian AI ventures are grappling with dwindling investment opportunities. The average deal size for Indian AI startups dropped from $14.7 million in 2022 to $7.1 million in 2023, highlighting the challenges faced by startups in attracting significant capital. However, success stories like Krutim and Sarvam AI, securing notable funding rounds, underscore the resilience and potential of Indian AI startups amidst funding constraints. As the global economy increasingly embraces AI technology, Indian startups continue to navigate funding challenges while striving to leverage AI’s transformative potential in various sectors.