In the startup world, the down round season is growing longer.  Valuations steeply declined for over 20% of the major venture capital agreements in 2023 and up to April of this year. Based to statistics from Pitchbook, this is the highest since 2015.

Prior to 2023, the year with the greatest percentage of down rounds was 2017, following the financing frenzy of 2015–16, when 17% of venture capital agreements had valuation reductions. According to analysts, the pattern is probably going to last the entire year. That's terrible news for early-stage and growth firms alike, as well as big unicorns.

According to Deepak Gupta, general partner at WEH Ventures, "down rounds may continue for some time as some of the excess valuations of 2020–21 have not cleared through, in terms of company performance catching up, and growth stage deals are still muted relative to historical levels." Many entrepreneurs, according to Gupta, had advanced their fundraising plans for 2023 by a year, but they will now have to come out for oxygen, which might result in down rounds.

Four of this year's twenty venture capital deals—mostly expansion and late-stage rounds—were made at a lower value. Seventeen of the eighty-four growth and late-stage agreements from the previous year were down rounds.

The most recent example of this is the online drug store PharmEasy, which raised $216 million recently. The firm was valued at $710 million in a funding round headed by Manipal Education and Medical Group of Ranjan Pai and current investors. This represents a 90% reduction from the company's $5.6 billion valuation in 2021.  According to reports, discussions to invest in gold loan startup Rupeek are also underway with private sector lender Axis Bank and Pai's investment firm Claypond Capital. It is probable that the firm's valuation will be reduced during the round.

In December 2023, B2B trade platform Udaan raised $340 million at a valuation of around $1.8 billion, down from its high of $3.2 billion in 2021. In addition to aiming to raise about $300 million, Meesho could have to accept a value of $3.9 billion, which is 20% less than the $4.9 billion it was able to secure in 2021 during its last fundraising. Moreover, Byju's rights offering from earlier this year was valued 99% less.

In the first quarter of this year, financing for Indian startups decreased to $1.9 billion from $2.2 billion in Q4 2023. According to Tracxn statistics, the decline followed three quarters of 2023 of steady growth.

According to Tracxn statistics, Indian entrepreneurs raised a total of $1.9 billion in investment during the January-March quarter of this year, as opposed to $2.2 billion during the same time last year. They raised $8.4 billion in total in 2023, which was the least amount in the previous five years and far less than the $25 billion they raised in 2022.