Venture funding, leadership, inflation, and lay offs have taken a hit in startups globally in 2023 amid economic challenges.
While many startups have failed, but others experienced growth in 2023. India supports the growth of startups due to availability of low-cost skilled labor, an important aspect of building a business, as well as increasing funding from national and international firms. According to Financial Express, “Start-up funding has reached a new high in 2023. In addition to the huge venture capitalists, institutional investors, and pension funds are also investing in many new online businesses.” The top gainers in the funding deals are the Fintech and financial services firms, space tech, retail and ecommerce agencies, and EdTech organisations. In this article, we will discuss about startups that saw the success and those which failed miserably in 2023.
In 2023, India's space tech startups have achieved new heights, whereas artificial intelligence-based firms are attracting investors as well as electric vehicle startups are showing signs of faster growth in India.
As per LinkedIn Top Start-ups 2023 list for India; “This year, four fintech startups were made into the list of LinkedIn--Ditto Insurance, Fi, Jar, and StockGro. Edtech is another prominent industry in this year’s list with companies like GrowthSchool (10), Teachnook (13), and AccioJob (17).”
Indian space startups have received private investment of more than Rs 1,000 crores in the current year. Union Minister Jitendra Singh expressed that “India has the potential to achieve a USD 100 billion space economy by 2040.”
The Indian government has played a pivotal role by the introduction of the Indian Space Policy 2023.
ISRO has launched more than 430 foreign satellites that provided an earnings of 290 million euros, while revenue from American satellites is beyond USD 170 million. Some of the growing space tech firms are Skyroot Aerospace, Dhruva Space, and so on.
The current not so stable venture capital market climate has brought multiple startups to its knees. A loss for a start-up is just a new lesson learned. They can surely continue their quest to create something brilliant and make an impactful comeback.
“The wave of shutdowns among Indian startups is largely a repercussion of the funding frenzy of 2021 and 2022. During this period, a surge in capital led to the emergence of unsustainable business models. Even viable models were distorted by the ‘growth at all costs’ mentality, fueled by excessive funding. This approach often neglected the path to profitability and is now faltering under the weight of higher capital costs and attractive, lower-risk investment alternatives in the market,” Anirudh Damani, managing partner at Artha Venture Fund.
Following are some of the Indian Startups that shut down in 2023. Low retention enforced elevation-backed Anar firm to shut down. Due to capital crunch, Belora Cosmetics was shut down. Content Startup Bluepad also faced the same fate due to PMF Issues. Kalaari-supported ConnectedH was closed due to unaddressable market realities. Edtech startup DUX Education was one of the first Indian startups to shut down in this year due to raise funds,
Globally, there are some big names which shut down like: Vedere Bio, a start-up to prevent vision impairment and restore eyesight. This startup started well, but couldn't sustain as they failed to deliver satisfactory results. Some other companies failed are IRL, Cana, Mindstrong, Mandolin, and so on.
One of the important reasons behind startups failure is not realising target market and the need of the customers. A solid start-up plan is not only a well-crafted business model, and a good useable product or service but also understanding target audience’s demand.
Embracing failure always gives a learning opportunity to enhance resilience and perseverance in any startup.
In conclusion, success in startup is achievable by building a strong team, managing financial obstacles, understanding market needs, navigating competitive landscapes, and learning from failed startups. India has steadily emerged as the 3rd largest startups ecosystem globally. Thus, 2024 holds a lot of promise as an era of evolution and opportunities.
