Kerala-based startups to witness 40% jump in seed-stage funding by 2023, report says
Total funding for Kerala-based startups to grow by 15% to $33.2 million in 2023 Food & Agriculture tech-related startups saw a 266% increase in funding.
Among these, Kochi has emerged as the leading city for start-up funding in Kerala.
According to the Tracxn Jio Annual Report, Kerala-based startups in the 'seeding stage' witnessed a huge rise in funding in 2023.
According to the data intelligence platform, startups in Kerala attracted $26.2 million worth of seed-stage investment in 2023 and raised $18.7 million in 2022, growing at a 40% annual pace. According to Tracxn Technologies' Kerala Tech 2023 report, Avana Capital Advisors, 9 Unicorns and Huddle are considered the most active investors in seed-stage rounds.
Meanwhile, the company had promised to pay the cash-strapped Dunso ex-employees by the end of March.
Overall, Kerala-based startups raised $33.2 million in 2023, a 15% increase from the $28.9 million raised in 2022.
However, early stage funding was $7 million in 2023, down 32% from $10.3 million in 2022. In the last five years, the Kerala startup ecosystem had not recorded any late-stage funding.
Among the sectors, food & agriculture tech-related startups grew 266% from $2 million in 2022 to $7.4 million in 2023. The retail sector received total funding of $3.9 million in 2023. But funding in the ed-tech sector to Kerala-based startups has declined from $7.2 million in 2022 to $3.47 million in 2023.
Among cities, Kochi leads the way in funding, accounting for 87% of the total funds raised in the state. Kochi-based startups have raised around $29 million, while those in Alappuzha and Thiruvananthapuram have raised $4 million and $709k respectively.
Layoffs continue, cutting nearly 32,000 jobs in the software industry. The Kerala tech startup ecosystem witnessed six acquisitions in 2023, a slight improvement from two in the previous year.
Physics Walla acquired Xylum Learning for $61 million. Radiant Cash Management last year acquired Kochi-based Asimani, VRIZE Thiruvanthapuram-based Performatics, Carestack Weibo and Garienin Group acquired Kozhikode-based Bentlon last year.
The Kerala tech startup ecosystem ranks 11th among other startup landscapes in India, with a total funding of $354 million to date. Kerala Government has set up KSUM (The Kerala Startup Mission) agency to develop its startup ecosystem.