Kerala's startup scene experienced a significant increase in funding at the seeding stage in 2023, as reported in the Tracxn Geo Annual Report. According to Tracxn Technologies's Kerala Tech 2023 report, startups in the region attracted $26.2 million in seed-stage investments in 2023, marking a 40% surge compared to the $18.7 million raised in 2022. Notably, Avaana Capital Advisors, 9Unicorns, and Huddle emerged as the most active investors in seed-stage rounds.
Despite this boost, Kerala-based startups collectively raised $33.2 million in 2023, reflecting a 15% increase from the $28.9 million secured in 2022. However, early-stage funding saw a decline of 32%, dropping to $7 million in 2023 from $10.3 million in the previous year. It's worth noting that there have been no recorded instances of late-stage funding in Kerala's startup ecosystem over the past five years.
Among various sectors, funding for Food & Agriculture Tech-related startups saw a significant spike, reaching $7.4 million in 2023, up from $2 million in 2022. The Retail sector secured $3.9 million in funding, while the ed-tech sector experienced a decline, attracting $3.47 million in 2023 compared to $7.2 million in 2022.
In terms of geographical distribution, Kochi emerged as the leading city for funding, accounting for 87% of the total funds raised in the state. Startups based in Kochi raised $29 million, followed by Alappuzha with $4 million and Thiruvananthapuram with $709K.
The Kerala tech startup ecosystem witnessed six acquisitions in 2023, a slight increase from the previous year. Notable acquisitions include Physics Wallah acquiring Xylem Learning for $61 million and Radiant Cash Management acquiring Kochi's Acemoney.
Overall, Kerala's tech startup ecosystem ranks 11th among other startup landscapes in India, with a total funding of $354 million to date. The Government of Kerala has established the KSUM (The Kerala Startup Mission) agency to foster the development of the startup ecosystem in the region.
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