Viewpoint: 2023 was a year of challenges and learnings for India's startup ecosystem

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Sumangal Vinjamuri is AVP, Investments; and Sanjay Nath is Partner, Investments at Blume Ventures, an early-stage Indian venture capital firm.

The year 2023 has been one of dichotomies for the Indian startup ecosystem.

GlobalData reports that between Jan-Oct 2023, 920 deals were announced totalling $6.3 billion in funding in the Indian startup ecosystem. Contrast this with the same period in 2022, when 1,499 deals totalling $19.2 billion were announced -that's a drop of nearly 67%.

Yet, even in this winter, the best companies proved that they can adapt and thrive. They navigated through these choppy waters by focusing on sustainable and ideally even sustainable, profitable growth by building robust foundations and focusing on capital efficiency.

We can all agree that the ecosystem as a whole has picked up lessons that will stay with us for years to come. The approaches of the “zero-interest-rate period” are unlikely to return as long as the last 12-18 months stay on in our institutional memory.

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