In red-hot AI space, funds for Indian startups cooling down: Traxcn

PE/VC funding down 71% in CY23; it has slowed further in this year

Venture capital (VC) and private equity (PE) funding for Indian startups in the artificial intelligence sector has seen a dramatic decrease with deal sizes shrinking, notwithstanding the buzz around the country’s potential as a major AI hub.

Data from research agency Traxcn, which tracks PE/VC investments, shows that total funding for AI startups in India, which started with a bang in 2022 at $599 million, dropped sharply in 2023 to $168.4 million — a decrease of over 71 per cent. Since January this year, startups have only managed to garner $31.9 million in three rounds.

However, that’s not the case