Indian Startup Funding Climbs 20% To $8.7 Bn In 2024’s First Nine Months

SUMMARY

In the first three quarters of the calendar year 2024, the cumulative funding bagged by Indian startups stood at $8.7 Bn as against $7.2 Bn raised in the corresponding period a year ago. The deal count, too, grew to 766 deals from 691 deals in 2023

Although the year started on a slower note, startup funding picked up pace in the second quarter, registering a 24% YoY increase from the $2.5 Bn raised in 206 deals in Q2 2023

The funding winter that has been tormenting the world’s third-largest startup ecosystem for quite some time now finally seems to be waning. For one, the cumulative funding raised by Indian startups crossed the $150 Bn mark in the first half (H1) of the calendar year 2024.

Continuing the trend, the first nine months of the ongoing year experienced a 20% year-on-year (YoY) rise in funding. As per Inc42’s ‘Indian Tech Startup Funding Report, Q3 2024′, in the first three quarters of the calendar year 2024, the cumulative funding bagged by Indian startups stood at $8.7 Bn as against $7.2 Bn raised in the corresponding period a year ago. The deal count, too, grew to 766 deals from 691 deals in 2023.

However, the year (2024) started on a slower note. The startup funding in the first quarter stood at$2.2 Bn, down 33% YoY. The deal count, however, slipped to 214 deals from 229 in the year-ago quarter.

In the second quarter, the funding sentiment revived and Indian startups cumulatively raised over $3.1 Bn in 278 deals, registering a 24% YoY increase from the $2.5 Bn raised in 206 deals in Q2 2023.

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The major investor push came in the third quarter and the Indian startup ecosystem ended up raising over $3.4 Bn in 262 deals. This was a 100% increase from the $1.7 Bn raised in Q3 2023 via 205 deals. This can be attributed to a significant jump in the number of mega-funding deals in the July to September quarter.

Mega Deal Madness Of 2024

In the third quarter of 2024, the Indian startup ecosystem saw as many as 10 funding deals north of $100 Mn. This was double the five deals that materialised in the first six months of the year. Further, the number of funding rounds during the quarter remained the highest versus the past eight quarters.

Quick commerce major Zepto emerged as the investor’s favourite startup, raising $1.05 Bn during the year. While the startup raised $665 Mn in June in its Series E round led by investors Glade Brook, Nexus, and StepStone, it raised another follow-on financing round led by General Catalyst of $340 Mn later in August.

Other major deals include edtech major PhysicsWallah’s $210 Mn funding round, Rapido’s $200 Mn funding, and hospitality major OYO’s $175 Mn down round.

Besides the spurt in mega funding rounds at a late startup stage, funding numbers zoomed across the board. As many as 277 startups raised between $5 Mn and $99 Mn in the three quarters of the year.

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This marks a 47% jump in the number of deals that materialised in this segment in the first three quarters of last year. Meanwhile, 376 deals materialised where startups raised under $5 Mn. This was up 7% from last year’s 350 deals under $5 Mn.

Unicorns & IPOs: What Made 2024 Significant For Indian Startups

According to Inc42’s investor sentiment survey from mid-2024, 93% of the 50+ startup investors surveyed believed 2024 would be a turnaround year for Indian startups, with only 7% expecting continued funding corrections.

The optimism was also driven by the strong performance of the Indian public market. Given the improving performance of the Indian market, more investors were expected to back promising, high-potential startups.

With the Indian markets on a winning streak, more and more tech companies are taking the IPO plunge in India. As of now, 10 startups have already made their public market debuts this year. The list includes startups FirstCry, Unicommerce, Ola Electric, ixigo, Go Digit, Menhood, TAC Infosec, TBO Tek, and Trust Fintech.

Meanwhile, there are a plethora of startups that are enroute to go public. While the market regulator, Securities and Exchanges Board of India (SEBI), has already cleared fintech major Mobikwik’s INR 700 Cr IPO, other startups that are in line to get the SEBI nod are Ather Energy, BlackBuck, Zappfresh, Smartworks, DevX.

Besides, foodtech major Swiggy is also on the verge of realising its IPO dreams. Swiggy’s proposed IPO comprises a fresh issuance of shares worth INR 3,750 Cr and an offer for sale (OFS) component of 18.53 Cr equity shares.

Along with a host of listings from the startup ecosystem, the year also saw six unicorns enter the unicorn club, taking the number of unicorns in India to 118. The number of startups raising fresh capital at valuations north of $1 Bn has tripled so far this year versus last year. However, the total number of unicorns minted this year is still a far cry from the year 2021 when India registered a blessing of 44 unicorns.

Notably, the year started off with India getting its first AI startup unicorn in the form of Krutrim. The Bhavish Aggarwal-led startup entered the unicorn club with a $50 Mn funding round led by a clutch of investors. Following Krutrim’s lead, fintech SaaS startup Perfios, listed startup RateGain, ride-hailing major Rapido, IPO-bound Ather, and fintech Moneyview have entered the coveted unicorn club so far this year.

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