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Fintech's Success Amidst the 2023 Secondary Deals Downturn


Fintech Dominates Secondary Transactions:

Fintech witnessed the highest number of secondary transactions in both 2023 and 2022, according to the Indian Start-ups Deal Report-2023 by PrivateCircle.


Definition of Secondary Round:

A secondary round occurs when an existing shareholder sells their shares to a third party.


SaaS Also High in Secondary Deals:

Software as a Service (SaaS) saw a significant frequency of secondary deals in 2023 and 2022, showcasing the sector's resilience in providing exits to investors.


Shift in Secondary Deals from E-commerce to Fintech:

During the funding peak in 2021, e-commerce had the highest number of secondary deals, followed by Fintech and Media & Entertainment. This pattern shifted in subsequent years.


Analysis of Secondary Deals:

PrivateCircle tracked 252 secondary deals at 117 startups valued at $500 million or above over the last three years, providing a comprehensive analysis.


Drop in Funding and Deal Counts in 2023:

In 2023, there was an 80% drop in the number of secondary deals compared to the previous year, and a 62% YoY drop in startup funding. Primary funding rounds stood at 1,444 deals in 2023, a significant decline from previous years.


Venture Capital Optimism Despite Slowdown:

Despite the slowdown in funding rounds, venture capital funds are reportedly optimistic. Dr. Murali Loganathan, Director of Research at PrivateCircle, expects VC activity to pick up later in the year. Strong business fundamentals allowed some companies, including Lenskart, to raise significant funding rounds in 2023.


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