70% of startups are investing in artificial intelligence (AI) to increase productivity and internal efficiency, according to a new report produced by technology industry summit Nasscom in cooperation with information company Zinnov.
India Tech Startup Landscape Report 2023, over 950 tech startups were founded last year, and over 750 received funding. "Despite facing the world's economic and regulatory challenges in 2023, Indian tech startups have been able to strengthen their business goals and drive profitability and growth as a priority," said Debjani Ghosh, President of Nasscom.
The country now has over 31,000 tech startups, and their cumulative funding over the last five years has exceeded $70 billion. Further, the share of tech startups established in emerging hubs in tier-2 and tier-3 cities rose to 40% in 2023.
“Tier II/III cities are becoming new hubs, shrinking the startup landscape,” Zinnov CEO Pari Natarajan said, adding that India and its ecosystem continue to grow. 4,444 startups raised $6 billion in equity funding last year, with 72% of all funding in early stages, which will reach 64% by 2022, according to the report.
In a "funding frenzy" affecting startups around the world, the report said a sharp fall in funding at the end of the year has reduced valuations and put more emphasis on profitability. Cash flow, funding availability and low-demand issues are the three most significant challenges facing startups in 2023.
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