New Delhi, March 14 (IANS): India retained its position as the second-largest destination for venture capital and growth funding within the Asia-Pacific region last year, a report showed on Thursday.

Despite facing headwinds, India's VC landscape exhibited resilience in 2023, marking a year of continued moderation, according to the report by Bain & Company in collaboration with the Indian Venture and Alternate Capital Association (IVCA).

"In a year seemingly rife with hurdles, investors demonstrated resilience by adjusting to the evolving landscape. There was a perceptible shift in investment focus from tech-first bets to more traditional sectors underpinned by strong fundamentals -- such as healthcare, retail, and financial services," said Sai Deo, Partner, Bain & Company.

Investment activity echoed a muted sentiment globally, with investments declining by 65 per cent relative to 2022 and reaching $9.6 billion in 2023 compared to $25.7 billion in the previous year.

Generative AI gained significant momentum as funding soared from $15 million to $250 million over 2022-23 globally.

Overall, tech-first sectors (consumer tech, fintech, and software/SaaS) maintained their dominance in 2023, capturing nearly 60 per cent of funding.

Investor focus drifted to traditional sectors with strong fundamental tailwinds (banking, financial services, and insurance, healthcare) as well as emergent themes [electric mobility and generative artificial intelligence), the report noted.

Electric mobility was the other green-shoot sector that gained salience (from 3 per cent to 7 per cent of funding), as the rising maturity of the ecosystem fuelled investor interest, the findings showed.

"Over the longer term, global investors will likely remain bullish on India as an investment destination with numerous promising sectors and themes primed to draw investor interest," said Sriwatsan Krishnan, Partner, Bain & Company.