The funding in domestic start-ups witnessed a minor uptick of 3% to $966 million in January this year, as against $935 million in December last year, according to the latest report by Tracxn. During the month, the number of funding rounds witnessed a decline of 22%. 

As per the report, the late-stage funding accounted for the increase in funding raised with $688M being raised in total in January 2023, an increase of 16% as compared to December 2022. Seed stage saw a decrease of 9% from $61 million in December last year to $56 million in January this year, while early-stage funding saw a decline of 30% from $283 million in December last year to $199 million in January 2023. 

The top three sectors that received the most funding in January of 2023 were fintech, enterprise applications, and energy tech. The FinTech sector witnessed a surge of 144% in investments to $637 million in January this year, as against $261 million in December last year. 

"The increased adoption of digital financial services like UPI by consumers has been the major reason for the hike. The introduction of CBDC (Central Bank Digital Currency) is also expected to boost the sector," the report said. 

Energy Tech has seen a substantial increase of 386% from December last year to January this year, owing to government policies and increasing concerns on pollution. In the Union Budget for FY23-24, which was presented in the parliament last week, the government announced the exemption of customs duties on lithium-ion batteries that are used in electric vehicles, in order to drive growth in the industry. The government also announced introducing the Drone Shakti Program for Indian drone startups.

"These measures taken by the government of India can accelerate the growth in existing startups as well as provide an opportunity for upcoming startup ideas," the report said.  

Meanwhile, food and agriculture tech witnessed the largest fall in funding by 82% to $56.8 million in January this year, as against $319 million in December last year. In the Union Budget for FY2023-24, that was presented in the parliament last week, the government announced several policies and initiatives such as building a national Agristack, Agriculture Accelerator Fund, promoting chemical-free farming, delivery of hi-tech digital services to farmers, and use of drones to aid farmers, in a bid to digitise agriculture sector.

"The recent union budget has proposed the formation of the Agriculture Accelerator Fund to encourage and accelerate the digital infrastructure for the agricultural sector and this will also help in the long term growth of startups in this space," Traxcn said. 

During the month, the domestic startups witnessed a 17% increase in acquisitions to 14 deals, as against 12 acquisitions in December last year. However, no startup was either listed for IPO or valued at $1 billion to achieve Unicorn status during the month. Accel, Sequoia Capital, and Y Combinator are the top investors in India for January 2023. Bangalore continued to lead as the city with maximum startup funding, followed by Delhi NCR and Hyderabad in January 2023. 

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.