The $100 Mn Chase: Mega Deals Dwindle In 2023, Recede To Pre-2018 Levels

The $100 Mn Chase: Mega Deals Dwindle In 2023, Recede To Pre-2018 Levels

SUMMARY

Mega deals ($100 Mn and above) fell with a thud during the year to 23 from 60 in 2022 and 109 such deals in 2021

The top 10 mega deals in 2023 accounted for more than 42% of the total capital inflow into the Indian startup ecosystem and included names like PhonePe, Lenskart, Flipkart, DMI Finance, Ola Electric, et al.

The fintech sector continued to be the darling of the investors as it accounted for more than half, 12 to be precise, of the total mega deals witnessed by the ecosystem in 2023

The year 2023 embraced corrections as the Indian startup ecosystem came to terms with the harsh realities of the extended funding winter, layoffs and wary investors. “Relative to other sectors like SaaS which suffered from multiple headwinds from decline in global customer traction, some of the established fintechs showed high growth combined with a convergence to profitability, and investors chose to fund them,” said general partner at VC firm WEH Ventures,  Deepak Gupta.Chiming in, JITO Incubation and Innovation Foundation’s (JIIF’s) chairman Rajat Mehta said, “The outlook for mega deals in the startup landscape in 2024 will be shaped by a range of factors, including economic conditions, regulatory dynamics, and emerging market trends. The general central elections in India and the US will play a major role and will lean more towards creating an extremely positive sentiment for mega deals.” 

Funding taps ran dry across new-age sectors and ventures as investors tightened their purse strings harder than ever. As a result, total startup funding receded to a seven-year low of $10 Bn in 2023, even lower than the $13 Bn that was raised in 2017. The contrast becomes even sharper when we compare the data with 2022 and 2021 when Indian startups raised $25 Bn and $42 Bn, respectively. 

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