Wary VCs go slow on startup deals, step up diligence

Risk capital investors are being more stringent in their analysis of business models and are taking longer to close deals as venture capital inflow to India’s startup industry dropped by nearly a fifth in the first quarter of 2023. This sharp decline is delaying closure of both late stage as well as early stage deals according to investors, founders and those involved with funding talks.

Aggregate venture funding fell to $2.19 billion during January-March 2023 dropping from the $11.34 billion invested in the same quarter last year according to data sourced from Venture Intelligence. The inflow was higher even in the final quarter of 2022 when startups received total funding of about $3.17 billion.