Indian startups are growing very quickly in 2024. In the first half of the year, Indian startups got $7 billion in funding.
However, the $7 billion raised in early 2024 is still much less than the $20 billion raised in early 2022.
But this large amount of money is much more than the $5.92 billion raised during the same time in 2023.
The rise in funding reflects the revival and more positive sentiment towards Indian entrepreneurship and the dynamism of startups in geography.
While relatively young Indian startups struggle with economic cycles and global instability.
They are already ready to attract significant funding and achieve sustainable growth.
Big funding achievements
According to ETCFO Magazine, In the first half of 2024, $7 billion was raised through many funding deals.
Out of 318 deals, 182 were for growing or late-stage startups, totalling $5 billion.
Early-stage startups also played their part in funding by closing 404 deals worth $1.
Further, there were 99 deals which were not publicized and were also involved in this huge funding amount.
Two startups namely Perfios and Krutrim SI Designs in this period became unicorn companies; companies with a valuation of more than $1 billion.
This move points toward the increasing viability and possibilities of the Indian startup scene.
Growth driven by major deals
Of course, it’s quite impressive when growing from $5.
Many large funding rounds drive an increase in investments from $92 billion in H1 2023 to $7 billion in H1 2024.
These major investments were made by late-stage companies, including Zepto, Flipkart, PharmEasy, and Lenskart.
Specifically, nearly $2 billion was invested in startups in June only.
Which is higher than the average monthly funding of $1 billion during the first five months of the year.
This is a clear indication that investors have confidence in the Indian startups and their ability to deliver.
The infusion of large amounts of capital into these companies demonstrates the belief in their potential to grow and generate high returns.
Leading growth and early-stage startups
The top growth-stage deals include investments in startup companies.
Such as Zepto which secured $665 million, Flipkart $350 million, PharmEasy $216 million, and Lenskart $200 million.
In addition to these large funding rounds for proven startups, there have been equally big investments in early-stage startups.
The invite-only networking platform, SCOPE, spearheaded the initial funding with an incredible $90 million.
Other early-stage leaders are; Krutrim, an AI startup; Avail, a blockchain startup; Indkal an e-commerce startup and IBC a battery tech startup.
These investments into both second-round and seed-stage startups show a healthy distribution of funding support for startups at different levels of growth.
Company buyouts and mergers
While funding activities increased, M&A decreased with 55 deals in the first half of 2024.
However, the year was marked by several large deals that highlighted the changes that occurred in the industry.
Recently, some big deals happened, DMI Group bought ZestMoney, Amazon got MX Player, CRED bought Kuvera, OneVerse got Spartan Poker, and 360 One bought ET Money.
These mergers and acquisitions show that startups are still teaming up to get bigger, offer more things, and save money by working together.
City and sector breakdown
In the first half of 2024, Bengaluru led in funding with 253 startups getting over $2.83 billion, which is 40% of the total money raised.
Delhi-NCR emerged second with 164 deals worth $1.
Large capital investments were made in Mumbai, Hyderabad and Pune.
The most funded category was e-commerce with 124 startups that attracted over $1. 87 billion.
This indicates that the role of the online retail market is still expanding in India.
Other large sectors were fintech, healthtech, SaaS, and EV.
The distribution of funding across numerous sectors proves the range of innovations and business models that Indian startups are creating.
Investment stages
Overall, 266 seed and pre-seed stage startups were established and received funding totalling over $457 million in the first half of 2024.
Previously, Series A and pre-Series A deals amounted to 134 and 80, respectively, suggesting a hearty flow of startups into later stages of funding.
Equity financing was also evident, with 58 deals totalling $784 million, presenting debt as another viable means of funding for startups.
In total, pre-IPO rounds amounted to nearly $250 million, which pointed to the desire of some startups to go public.
This shows that there is healthy competition within the startup community, with funding available for investment at all stages of the business cycle.
Decline in layoffs and shutdowns
In the first part of 2024, there was less firing in startups.
They fired 3,300 workers compared to 9,000 in the second half of 2023 and 15,000 in the first half of 2023.
This has implied an enhanced financial position and productivity among the start-ups thereby reducing layoffs.
Also, fewer executives were leaving their organizations with only 45 individuals leaving executive positions.
Moreover, only six startups were terminated in the H1 of 2024, which is significantly lower than over fifteen in 2023.
These trends show that starting a company is getting easier, and businesses can handle challenges better and keep running.
New trends
There are new and innovative trends emerging in the Indian startup ecosystem in the year 2024.
It is becoming apparent that generative AI is on the rise and that spiritual tech startups have raised over $36 million.
Large institutional investors bought stakes in some traditional fashion brands such as TechnoSport, Libas and Rare Rabbit.
These trends represent the changing needs and wants of the consumer, coupled with the solutions that startups bring to the table to fill those gaps.
An emphasis on innovative technologies and specific sectors reflects the futuristic nature of the Indian startup landscape.
A future for Indian startups
Despite the funding levels of the first half of this year not being achieved again, the Indian startup ecosystem is on a promising trajectory.
The authorities forecast that stable government policies and a rising stock market will continue to fuel funding in the coming months.
Returns that have been made from successful IPOs are being reinvested.
Which indicates that investors are opening up again for more Indian startups.
An encouraging sign for the next generation of innovative businesses is the reappearance of venture capitalists and family offices in the market.
As the ecosystem grows and becomes more stable, Indian startups are poised for extensive growth and to boost the economy, apart from being a major player in the international market.
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