Indian tech start-up funding could reach a pre-2021 level in 2023 with total funding touching around $15 billion. However, the peak in funding seen in 2021 is unlikely to be seen in the near term.

“Start-up funding in India in 2019 was about $14 billion which was up from less than a billion dollars in 2010. In 2020, because we lost half the year, it was about $10 billion. But then it went to over $40 billion in 2021 and also in 2022 because of investment activities in the first half remaining active, it was about $25 billion. Here we are in June of 2023 and we are trending towards $10-15 billion which is really where we were in 2019 and 2020. So, essentially we are expecting to be back to normal,” said Rajan Anandan, managing director of Peak XV Partners.

Sequoia India and Southeast Asia earlier this month rebranded itself as Peak XV Partners.

Speaking at a session organised by Red Seer on Thursday, Anandan said that 2021 was not a normal year as there was high liquidity after the Covid lockdown and every type of asset class — public and private equity, cryptocurrencies and real estate — had seen a rise in investment with interest rates in the US falling to zero.

“We are now back to the trendline and the trendline is positive. This is now the new normal. In terms of the number of investments in the first five months of 2023, it’s pretty similar actually,” he said, adding that there is active funding in seed and series A.

“Growth stage funding has slowed down,” he added.

“We are going through a cycle. But I would say what we are seeing today is more of the new normal. Growth markets will come back but only to companies which are of very high quality and fairly priced,” he added.