In 2024, Indian startups experienced a 32% decline in funding rounds compared to the previous year, although the aggregate funding amount itself grew by 6%.
According to TechCrunch, Indian startups raised $11.3 billion in 2024 over 1,448 funding rounds. While the number of funding events significantly fell compared to last year’s 2,114, the funding amount grew 6% from $10.7 billion in 2023.
Early-stage investment followed the overall trend, with Series A and Series B deals dropping from 420 last year to 387 this year, though the total investment held steady at $3.16 billion.
Seed funding faced a sharper decline, with the number of transactions falling from 1,545 to 925, and funding shrinking by 22% to $970 million. Startups dealing with artificial intelligence (AI) are still highly preferred among the early-stage deals. We have earlier reported that Indian AI-powered robotics startup Perceptyne secured $3 million in seed funding round led by Endiya Partners and Yali Capital.
Late-stage funding highlighted a growing preference for larger deals, as startups secured 136 Series C and later rounds, with an aggregate of $7.13 billion raised — a 12% rise in funding despite fewer deals. Notably, 20 funding rounds surpassed a $100 million threshold in 2024, compared to 18 in 2023.
The statistics suggest that venture capitalists have become more selective with their investment strategies. They increasingly adopt a cautious approach, focusing on startups with strong fundamentals and clear paths to profitability. Thus, investors might be focusing on a smaller number of companies but provide them with larger funding amounts, prioritizing sectors or companies they believe have long-term potential. In such a funding environment, investors often favour scale-ups over early-stage startups, seeking to back companies with established business models and traction instead of riskier, earlier-stage ventures.
The VC shift has, in turn, led to a more competitive environment for startups seeking funding, emphasising the importance of robust business models and sustainable growth strategies. Startups in such circumstances might also aim to raise larger rounds in anticipation of a tougher funding environment, reducing the need for multiple smaller rounds.
On the bright side, over 40 Indian startups completed their IPOs this year — an 80% increase from 2023. Bengaluru-headquartered food delivery platform Swiggy had a $1.35 billion listing just last month, marking the largest tech IPO of 2024 globally. Media reports suggest that about 20 India’s startups are preparing for public listings next year.
While India’s VC sector reshuffles its investment strategies but still illustrates funding growth, startups across the European region are projected to raise $45 billion from VC sources in 2024, a slight drop from the revised $47 billion in 2023.
