Mumbai Startup Funding Plummets To A 3-Year Low Of $1.5 Bn In 2023

India’s third-highest funded startup hub, Mumbai, fell to a three-year-low in overall startup funding in the year of the extended funding winter, 2023.

As per Inc42’s latest “Indian Tech Startup Funding Report 2023”, startup funding in Mumbai declined 62% year-on-year (YoY) to $1.5 Bn in 2023 from $5.5 Bn in 2022. The total funding raised by Mumbai startups during the year remained close to the $1.2 Bn raised in 2019. The number of deals, too, declined from 249 in 2022 to 160 in 2023.

The decline was consistent with the broader fall in funding across the Indian startup ecosystem in 2023. Despite Indian startups securing just over $10 Bn in the previous year, total funding in the Indian startup ecosystem plummeted to a seven-year low.

In 2023, Mumbai saw two mega deals. While Mumbai-based quick commerce unicorn Zepto raised $231.25 Mn across two deals last year, B2B digital lending startup Mintifi raised $110 Mn (INR 902 Cr) as part of a Series D funding round led by Premji Invest.

Notably, in August, Zepto raised $200 Mn in its Series E funding round at a valuation of $1.4 Bn valuation, becoming the first unicorn of 2023.

The other two major hubs were Bengaluru and Delhi NCR. While Bengaluru startups raised $4.2 Bn across 249 deals, Delhi NCR lapped up $2.7 Bn across 243 deals.

Ecommerce, Fintech, & Enterprise Tech Remained The Top Funded Sectors

In Mumbai, investor interest was found predominantly focussed on three sectors in 2023 — ecommerce, fintech, and enterprise tech.

Pocketing $330 Mn, the ecommerce sector secured the highest number of deals at 45 in 2023. Next, Mumbai-based fintech startups raised $345.8 Mn in 29 deals, the highest among all the sectors. Enterprise tech startups in Mumbai raised $172.5 Mn across 25 deals.

Among other sectors, edtech startups raised $72.4 Mn in 11 deals. Despite a modest funding amount of only $7 Mn, Mumbai-based healthtech startups witnessed 10 deals in 2023. Meanwhile, travel tech startups lapped up $83.5 Mn in funding across five deals.

Apart from these sectors, sectors such as media and entertainment, logistics, and proptech received investor interest, raising $88.7 Mn in six deals, $60.8 Mn in four deals, and $12 Mn in six deals, respectively.

Further, between 2014 and 2023, the Mumbai startups have secured a total of 1,800+ deals to raise more than $18.6 Bn.

Maharashtra Govt Backing The Startup Cause

In a bid to boost its startup landscape, the Maharashtra government is taking various initiatives to foster sustainability and innovation.

According to Maharashtra’s deputy CM Devendra Fadnavis, the government is keen on partnering with startups that demonstrate a commitment to sustainability.

The state’s current startup policy, launched in 2018, is also reportedly undergoing a revision to provide more comprehensive support across various sectors. The Maharashtra State Innovation Society is overseeing the effective implementation of these initiatives.

Among other initiatives, one of the significant moves is the government’s plan to create dedicated startup zones with all necessary facilities under one roof.

These zones will offer coworking spaces, housing, high-speed internet, and data centres. The goal is to elevate Maharashtra’s status as a thriving hub for innovation and entrepreneurship.

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