In the first half of 2024, India’s tech startup ecosystem witnessed a notable resurgence in funding, as highlighted in Tracxn’s India Tech Semi-Annual Funding Report. During this period, these startups collectively secured $4.1 billion in funding. This figure represents a 4% increase from the $3.96 billion raised in the latter half of 2023. However, it also reflects a 13% decrease from the $4.8 billion raised in the corresponding period of the previous year.
This resurgence in funding underscores a recovery trend following a two-year decline, indicating renewed investor confidence and a growing momentum within India’s tech startup landscape. Despite the year-on-year decrease, the steady increase from the second half of 2023 demonstrates a positive trajectory for the sector. Factors contributing to this rebound include innovations in various tech domains, strategic expansions, and continued interest from domestic and international investors keen on tapping into India’s vibrant startup ecosystem.
India’s Tech Startup Funding Landscape in H1 2024
India ranks fourth globally in tech startup funding, trailing only the US, UK, and China. Bengaluru led the funding in India, followed by Mumbai and Hyderabad. Retail, Enterprise Applications and FinTech emerged as the top sectors in H1 2024.
Funding Breakdown
- Seed-stage: Increased to $455 million
- Early-stage: Stayed steady at $1.3 billion
- Late-stage: Rose to $2.4 billion
Noteworthy Achievements
Despite challenges, eight funding rounds exceeded $100 million. Flipkart secured a significant $350 million in Series J funding led by Google. Three new unicorns emerged, and 33 companies are on track to become unicorns, forming the “Soonicorn” club.
India’s Tech Startup Funding Trends and Outlook
Neha Singh, co-founder of Tracxn, noted that after four consecutive periods of declining funding since early 2022, India’s tech startup funding is showing signs of stabilizing and moving upward. This is a positive shift for India, which ranks fourth globally in tech startup funding. Indian startups are making significant strides in sectors like retail, enterprise applications, and fintech. These sectors are not only innovating but also contributing to economic growth.
This overview reflects the dynamic nature of India’s tech startup ecosystem, where, despite challenges, there’s resilience and growth in key sectors essential for future innovation and economic impact.
Overview of India’s Tech Startup Funding Trends in H1 2024
Early-stage startups maintained a steady funding amount of $1.3 billion, consistent with the latter half of 2023 but 28% lower compared to the first half of 2023. Late-stage funding increased to $2.4 billion, showing a 3.8% rise from H2 2023, though slightly lower by 1.3% from H1 2023.
Three new unicorns emerged in H1 2024, a significant increase from none in H1 2023. Additionally, 33 companies joined the soonicorn club. Initial public offerings (IPOs) also rose to 17 in H1 2024, up from six in H1 2023 and 12 in H2 2023.
Regional Insights
- Bangalore led in total funds raised during this period, followed by Delhi and Mumbai.
Top Investors
Accel, Blume Ventures, and Peak XV Partners were the top overall investors in H1 2024. Venture Catalyst, Z Nation Lab, and We Founder Circle led in seed-stage investments. Peak XV Partners, Alpha Wave Global, and Saama Capital were the most active early-stage investors. DST Global, Epiq Capital Advisors, and UC-RNT Fund were prominent in late-stage investments during H1 2024.
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