The Indian startup ecosystem is yet to return to its 2022 exuberance as startup funding in 2024 saw only a marginal jump of 6 per cent from 2023. The tech startup ecosystem of the country attracted $11.3 billion in funding, growing by 6 per cent from $10.7 billion in 2023 but a significant 56% decline compared to 2022, said market intelligence platform Tracxn on Thursday. However, the deal volume or funding rounds dropped by 31 percent to 1,448 in 2024 from 2,114 in 2023.
With $11.3 billion, India was the third highest funded country in 2024 ahead of China ($9.4 billion) and Germany ($6.4 billion). The US with $144 billion and the UK with $13.4 billion funding were the top two startup ecosystems in 2024. Comparing half-year data, Indian startups secured $5.32 billion in the second half (H2) of 2024 across 540 funding rounds, recording a jump of 8 per cent from H2 2023 where $4.92 billion was raised across 890 rounds, but 22 per cent lower than the $6.81 billion raised from 1,210 rounds in H2 2022, indicating a shift to fewer, larger funding rounds and changing investor priorities. Quarter-wise the funding raised in Q4 2024 YTD (year-to-date) was $1.8 billion across 219 rounds, the lowest in the last three years. This represented a sharp 47.5 per cent decline from $3.5 billion in Q3 2024 and a 33.3 per cent decrease compared to $2.7billion in Q4 2023. Companies like Zepto, TI Clean Mobility, Flipkart, Mechanic Pro, DMI Finance managed to raise funds above $100 million in 2024 YTD.
Zepto’s $665 million funding in Series F round, which valued the company at over $3.6 billion, was the top funding round for this year. TI Clean Mobility’s $359.29 million funding in Series D round and Flipkart’s $350 million funding in Series J round, which valued the company at over $36 billion, were other major investments of 2024.
2024 was also a better year than 2023 in unicorn count with the emergence of six startups valued at $1 billion or above, marking a 200 per cent increase compared to two unicorns in 2023, but a 75 per cent decline from 24 unicorns in 2022.
On the acquisition front, 113 deals were recorded, representing a 19.3 per cent decline from 140 acquisitions in 2023 and a 41.1 per cent drop from 192 acquisitions in 2022. iBUS acquisition by NIIF for $200 million was the highest-valued acquisition in 2024 followed by the acquisition of Loyal Hospitality by Finnest for $160 million.
“The report highlights a year of resilience and recalibration for the Indian startup ecosystem reflected in the modest increase in funding compared to 2023. While funding patterns have evolved towards fewer, larger rounds, the emergence of six unicorns, significant IPO activity, and sectoral growth in gig economy, retail and enterprise applications demonstrate the ecosystem’s ability to adapt and innovate amidst global challenges making India an international hub for entrepreneurial excellence and innovation,” said Neha Singh, Co-Founder, Tracxn. The top VCs in 2024 were Venture Catalysts which led the most number of investments in 2024 with 26 rounds while Blume Ventures added 14 new companies to its portfolio. Late-stage VC investments saw SoftBank Vision Fund and India-based Creaegis add two companies each to their portfolios.
Sector-wise gig economy, retail, and enterprise applications were the top sectors. The gig economy recorded $2.2 billion in funding, growing 414 per cent from $420 million in 2023, highlighting its rapid growth and investor confidence.
On the other hand, retail startups secured $2.6 billion in 2024, reflecting a 13 per cent decline from $3 billion in 2023, indicating market recalibration. Enterprise Applications saw $2.2 billion in funding, an 11 per cent dip from $2.5 billion in 2023, reflecting strategic investment shifts.
In terms of IPOs, the technology ecosystem recorded a 76.19 percent jump over 21 IPOs in 2023 and 94.74 percent higher than 19 IPOs in 2022. Major IPOs were Swiggy, Niva Bupa, BlackBuck, and C2C Advanced Systems. (source- Financial Express)
