The Tracxn Geo Annual Report: Telangana Tech 2023, based on our extensive database, provides a round-up of funding and other major developments in the Telangana Tech space in 2023.
The Telangana Tech startup ecosystem ranks seventh in state-wise funding in India and has raised a total of $2.7 billion to date.
In 2023, it ranked ninth, with startups in the state raising $99.2 million. However, this is also the lowest funding the region witnessed in the last five years, a drop of 78% compared to the funding raised in 2022. This plunge in funding is primarily due to a global slowdown due to macroeconomic trends, and geopolitical factors that led to a shift in investing habits.
The Telangana Tech space secured total funding worth $99.2 million in 2023, 78% lower than the funds raised in 2022 and 81% lower than the $517.5 million raised in 2021. Seed-stage funding in 2023 stood at $14.1 million, an 82% decline compared with $78.4 million raised in the previous year. Early-stage funding fell 71% to $80.1 million in 2023. This space attracted late-stage investments worth $5 million in 2023, a massive decline of 95% from the $101 million raised in 2022.
Only two acquisitions were observed in the Telangana Tech space, as against nine in the previous year. Only one tech startup based in the state went public in 2023, slightly lower than three IPOs observed in 2022.
Aerospace, Maritime & Defense Tech, EdTech and Enterprise Applications were the top-funded sectors in 2023. The Aerospace, Maritime & Defense Tech sector secured total funding of $35.8 million, a decrease of 38% when compared with the amount raised in 2022. EdTech companies based in Telangana attracted investments worth $33 million in 2023, which is an increase of 65% in total funding compared with 2022. The Enterprise Applications sector attracted investments worth $19.4 million, a plummet of 91% when compared with 2022.
CIE IIITH, T-Hub and Indian Angel Network were the most active investors in the Telangana Tech landscape to date. We Founder Circle, Equanimity Investments, and Venture Catalysts were the most active investors in terms of seed-stage investments in 2023, while Temasek was the top early-stage investor.
The Telangana government has rolled out a few initiatives to support startups in the state, including allowing the entry of numerous accelerator programmes like Hyper Hub, inQ Innovation, T-hub, etc. The government also provides financial assistance under the T-Fund and T-SIRI initiatives to startups across rural and urban areas. Such measures play a crucial role in encouraging startups in the state.
