The “global funding winter” seems to have hit India's start-up industry hard as the number of unicorns in the country has declined for the first time in four years to 67 by the end of 2023, according to the Hurun Global Unicorns Index 2024 report. India’s overall unicorn tally stood at 68 in 2023 and 2022, 54 in 2021, and 21 in 2020 and 2019, as per the Hurun Unicorn Index.

The number starkly contrasts with earlier reports of the country having hit the 100-startup mark back in May 2022, with their collective value rising to $332.7 billion.

The largest drop-offs were ed-tech major BYJU's, which last year was valued at $22 billion and U.S.-based e-commerce aggregator Thrasio, which was valued at $10 billion. BYJU’s, facing troubles from all sides, is currently struggling to pay salaries amid legal disputes with foreign investors and corporate governance issues. That leaves BYJU’s with the highest drop-off in valuation across the world, falling below $1 billion.

"This is primarily fuelled by the lack of investment into start-ups despite the recent stock market record highs. Another factor is that founders from India produced more offshore unicorns than any other country, co-founding 109 unicorns outside of India compared with 67 in India. Of the unicorns founded outside of India, significantly all were in the US (95), led by the Bay Area, with 4 in the UK, 3 in Singapore and 2 in Germany,” says Anas Rahman Junaid, founder and chief researcher, Hurun.

India's tech startup ecosystem witnessed a significant funding decline of 72% in 2023, compared to $25 billion in the previous year, making it the lowest-funded year in the last five years, according to market research firm Tracxn.

When it comes to the latest tech rage, India has only one unicorn, Krutrim, India's first AI unicorn. There remains a substantial gap when compared to the United States and China, which lead with 60 and 37 AI unicorns, respectively. The top 3 factors contributing to the new unicorns in China hail from new energy, semiconductors and AI.

Notably, the aerospace or space-tech sectors emerged as a critical frontier where India lacks unicorns, a domain where the US and China have advanced with 10 unicorns each. “The situation presents a crucial juncture for India. Failure to seize this moment risks India falling further behind the US and China on AI, new energy, semiconductors and potentially aerospace," says Junaid.

India's unicorn list was led by on-demand food delivery start-up Swiggy and fantasy sports platform Dream11, which are worth $8 billion each and Razorpay worth $7.5 billion.

India ranked 3rd globally with the number of unicorns at 67, preceded by the US at 703, up 37 from the previous year, and China at 340, up 24 from the previous year.

Other countries in the top-10 list include UK (54), Germany (36), France (27), Israel (26), Canada (25), Brazil (18), and South Korea (18).

The main sectors of US-based unicorns were SaaS, FinTech and AI, for China it was AI, New Energy and Semiconductors, while for the rest of the world, it was Fin-Tech and e-Commerce.

London and Bengaluru led the cities from the 'rest of the world' with the most unicorns, followed by Paris, Berlin, Singapore and Tel Aviv.

The startups that saw the biggest rises in valuation this year were OpenAI (up $80 billion), SpaceX ($43 billion), ByteDance ($20 billion), Canva ($18 billion), Mihoyo ($15.8 billion), Binance ($14 billion), and Databricks ($12 billion), Stripe ($11 billion), Red Ventures ($10 billion), and Northvolt ($8 billion).

A total of 1,453 unicorns were found across the world, which were based across 53 countries and 291 cities. A total of unicorns saw their valuations rise, of which 171 were new faces, 170 saw their valuation drop, of which 42 were demoted as their valuation no longer made the cut of $1 billion. A total of 37 start-ups were promoted to the list, of which 29 went IPO and 8 were acquired.

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