Bengaluru, Feb 13 (IANS): Total funding into Karnataka-based tech startups sharply fell 72 per cent to $3.4 billion in 2023, from $12.2 billion in 2022, a new report said on Tuesday.

This decline can be attributed to the prevailing macroeconomic conditions and geopolitical issues as the total number of $100 million and above rounds fell to 8 in 2023 from 26 in 2022, according to the report by Tracxn, a data intelligence platform.

The state has more than 18,000 startups and is home to 39 per cent of the unicorn companies in the country.

The startups in the state attracted late-stage investments worth $2.3 billion in 2023, a 74 per cent decline compared with $8.9 billion in 2022.

Early-stage funding in 2023 stood at $784 million in funding, a drop of 71 per cent from the $2.7 billion raised during the previous year.

Seed-stage funding fell 54 per cent to $294 million from the $643 million raised in 2022.

Only eight $100 million and above funding rounds were observed in this space in 2023, as against 26 and 44 such rounds in 2022 and 2021, respectively.

PhonePe and Udaan secured the highest funding in 2023, raising $623 million and $377 million in Series D and Series E funding rounds, respectively.

Further, no new unicorns emerged from this space in 2023, a sharp contrast from seven unicorns in 2022 and 18 in 2021, according to the report.

Fintech, retail and enterprise applications were the top-funded segments in 2023.

The fintech sector in Karnataka secured a total funding of $1.15 billion in 2023, a decline of 51 per cent compared with $2.4 billion raised during the previous year.

In 2023, the Karnataka tech sector witnessed 35 acquisitions, significantly lower than 48 acquisitions in 2022 and 57 acquisitions in 2021.

Accel, Wellfound, and LetsVenture are the top investors in the state of Karnataka to date.