India has maintained its stature as the second-largest recipient of venture capital and growth funding in the Asia-Pacific region last year, according to findings from a report by Bain & Company in collaboration with the Indian Venture and Alternate Capital Association (IVCA).
“We have observed a noticeable shift in investment strategies from technology-centric ventures to more traditional sectors characterized by robust fundamentals, such as healthcare, retail, and financial services,” remarked Sai Deo, Partner at Bain & Company.
Globally, investment activity reflected a subdued sentiment, with investments declining by 65 percent relative to 2022, amounting to $9.6 billion in 2023 compared to $25.7 billion in the preceding year.
The report highlighted a substantial surge in funding for generative AI, escalating from $15 million to $250 million between 2022 and 2023 on a global scale.
Despite this trend, tech-centric sectors such as consumer technology, fintech, and software/SaaS sustained their dominance, capturing nearly 60 percent of total funding in 2023.
Investor attention also shifted towards traditional sectors exhibiting strong fundamental momentum, including banking, financial services, insurance, and healthcare, alongside emergent themes such as electric mobility and generative artificial intelligence.
Electric mobility emerged as a noteworthy sector, experiencing an increase in funding from 3 percent to 7 percent, fueled by the maturation of the ecosystem and growing investor interest.
“Looking ahead, global investors are likely to maintain a positive outlook on India as an attractive investment destination, given the diverse array of promising sectors and themes poised to attract investor attention,” remarked Sriwatsan Krishnan, Partner at Bain & Company, reflecting on the long-term prospects.
