During the countrywide recession, Kerala’s startup scene expanded by 15% in 2023

All of the nation’s main ecosystems had a year-over-year fall, while Kerala’s startup ecosystem is the only one to claim a noteworthy 15% gain in 2023, despite the financing winter.

The Geo Annual Report from market intelligence platform Tracxn states that startups in Kerala raised $33.2 million in 2023, a 15% increase over the $28.9 million they had raised the previous year.

The largest ecosystem, Karnataka, had a 72% decrease in investment, going from $12.2 billion in 2022 to $3.4 billion in 2023. Similar declines were seen in Maharashtra, which had a 62% fall to $2.1 billion, and in Delhi NCR, which saw a 61% decline to $1.5 billion.

With $354 million in total financing to date, Kerala’s digital startup ecosystem is now ranked 11th out of all startup landscapes in India, according to the research.

According to the research, 78% of the total cash obtained in 2023 came from seed stage finance. $26.2 million in seed-stage investments were made in this industry, a notable 40% increase over the $18.7 million raised the year before.

According to Neha Singh, co-founder of Tracxn, the area has consistently witnessed increase in financing since 2018, despite the investment amount being lower than in other states.

More than 4,000 digital businesses call it home, and more than 120 of them have received funding. With $175 million in financing overall in 2015, Kerala had its greatest level of support. The Kerala startup ecosystem has been recognized by the Union government as the best performer under the Category A list, placing it among the top five states in the 4th Edition of the States Startup Ranking. Once the present socioeconomic environment stabilizes, we anticipate additional development in the area with supporting government policies,” the speaker said.

The Kerala startup ecosystem, according to the Traxn research, has not received any late-stage financing in the previous five years. From $10.3 million in 2022 to $7 million in 2023, early-stage financing decreased by 32%.

There were a total of 11 fundraising rounds in this area in 2023 as opposed to 29 funding rounds during the same time in 2022, a 62% decrease. With $20 million in early investment, I Hub Robotics is now the most financed business in this industry as of 2023.

Six acquisitions were made in the Kerala tech startup ecosystem in 2023, which is a little increase from the two that were made in the year before. Xylem Learning, Acemoney, and Waybeo were a few of the businesses that were purchased in 2023.

Raveendranath Kamath, president of Kerala Angel Network, said that while there has been a discernible improvement, the state’s startup ecosystem is still in its early stages. He noted that deal volumes are still modest and that it is not nearly as dynamic as the bigger ecosystems.

“The caliber of startups is rising, and the Kerala Startup Mission deserves recognition for igniting and advancing the ecosystem,” Kamath said.

eleventh place

Kerala’s tech startup scene is now ranked eleventh in India among startup scenes, having raised $354 million in total financing to date.