Indian startups witnessed a significant decline in the number of funding rounds raised in 2024, according to data intelligence platform Tracxn. The number of startup funding rounds fell to 1,448 compared to 2,114 last year, indicating that investors are becoming more selective when striking deals.
Selectivity Among Investors
The disparity between the decline in funding rounds and the increase in overall funding indicates that investors are not hesitant to make large investments when they find attractive opportunities. Overall funding rose by 6% to $11.3 billion ($10.7 billion in 2023), highlighting the growing willingness of investors to take on more risk.
Early-Stage Investment Activity
The trend observed in early-stage investment activity reflects the broader market trends. The number of Series A and Series B deals declined from 420 to 387, although the total capital invested remained steady at $3.16 billion. This decline suggests that investors are being more discerning about which startups they choose to support.
Fewer Startups Raise Seed Funding
The number of seed funding transactions fell significantly in 2024, with only 925 deals compared to 1,545 last year. Additionally, the total capital invested in these deals contracted by 22% to $970 million. This trend indicates that investors are becoming increasingly selective about which early-stage startups they choose to support.
Late-Stage Funding
In contrast, late-stage funding showed a marked increase, with startups raising 136 Series C and later rounds for a total of $7.13 billion this year. This represents a 12% increase in capital despite the lower volume of deals. Furthermore, more startups are now achieving larger funding milestones, with 20 rounds worth over $100 million compared to only 18 last year.
Public Markets Emerge as a Bright Spot
The public markets emerged as a significant growth area for Indian startups in 2024. Over 40 startups completed initial public offerings (IPOs), an 80% increase from the previous year. The largest tech IPO globally this year was Swiggy’s $1.35 billion listing last month.
Pipeline of Startups Ready to Go Public
A pipeline of over 20 startups, including quick-commerce group Zepto and business-to-business marketplace Infra.Market, are preparing to go public in 2025. This suggests that the trend observed in 2024 is likely to continue into next year.
Early-Stage Startup Deals in the Works
Several early-stage startup deals are currently in the works, according to sources. Quick-commerce startup Swish is in talks to raise about $15 million, while Premji Invest is negotiating a deal with Digitap. SpotDraft is seeking to raise a debt round, and WhistleDrive is in talks to secure about $11 million.
Other startups, including Vodex.ai, 91squarefeet, Galaxeye.space, R for Rabbit, and Biryani by Kilo, are also reportedly engaged in advanced stages of deliberations with investors. These developments suggest that the Indian startup ecosystem remains vibrant and dynamic.
Conclusion
The decline in funding rounds and the rise in overall funding in 2024 signal a shift towards more selective investment strategies among investors. The trend observed in early-stage investment activity suggests that investors are becoming increasingly discerning about which startups they choose to support. However, late-stage funding shows no signs of slowing down, with more startups achieving larger funding milestones. The public markets emerge as a bright spot, and the pipeline of startups ready to go public is substantial. Overall, 2024 has been a significant year for Indian startups, and we can expect to see further developments in the coming months.
Topics
- 2024 venture trends
- India
- Startups
- venture funding
About the Author
Manish Singh is a senior reporter at TechCrunch, covering India’s startup scene and venture capital investments. He also reports on global tech firms’ India play. Before joining TechCrunch in 2019, Singh wrote for about a dozen publications, including CNBC and VentureBeat.
