The AI Booster Shot: Seed Stage Funding Thrives In 2024 With A 31% YoY Surge

As the world’s third-largest startup ecosystem braces for what some may call a high-octane 2025 for Indian startups, let’s take a while to reflect on how different new-age ventures performed on the funding podium across their various lifecycles — seed, growth and late.  

However, before we reveal the findings of Inc42’s Annual Funding Report 2024, it is imperative to mention that investors remained optimistic, albeit cautiously, about Indian startups last year, which resulted in a 20% year-on-year (YoY) uptick in total funding in 2024 to $12 Bn+. With this, the Indian startup funding has now settled at pre-Covid-19 levels.  

What’s interesting is that although more than 1K deals got locked during the year, no particular stage (seed, growth or late) was responsible for pulling the most weight, and all performed equally well.

For context, while the year saw a 31% YoY increase in seed-stage funding, growth and late-stage funding were up 21% and 25%, respectively.  

“2024 was a post-correction year for the Indian VC and startup ecosystem after the corrective years of 2022-2023,” BlueGreen Ventures’ founding partner Anup Jain said.

He added that the funding uptick wasn’t skewed towards a particular segment or stage of startups but was well distributed across the ecosystem.

Now, let’s dive deeper into understanding how the Indian startup funding fared across stages. 

Funding Rockets But Deal Count Staggers At Seed Stage 

Seed-stage startups raised $893 Mn during the year, registering an increase of 31% from the $681 Mn raised last year.

Industry experts believe that the uptick in early-stage funding was the result of tepid or cautious investors.

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However, fewer deal counts panned out at this stage during the year. In 2024, 433 funding deals materialised for startups operating at a seed stage, which was a 7% decline from 2023.

This could be largely because of an increase in the average ticket size of funds at this stage. The Inc42 report reveals that the average ticket size of seed stage funding witnessed a 25% to $1 Mn compared to 2023. With this, the median seed-stage ticket size was seen hovering at 2021 levels. 

Sector-wise, seed-stage enterprise tech startups were investors’ favourite bets, raking in $251 Mn in fresh capital across 93. Enterprise tech startups at this stage secured $143 Mn in 94 deals last year.

At a sectoral level, fintech trailed enterprise tech with startups cumulatively raising $163 Mn in 2024. Early-stage ecommerce startups took the third spot by raising $127 Mn via 89 deals in 2024.

Notably, investors’ optimism for early-stage startups operating in the enterprise tech segment seemed to have stemmed from the growing adoption of AI. 

“The adoption of GenAI is no longer a choice but a necessity, as both enterprises and consumers actively integrate AI-driven solutions into their operations. Moving beyond proof-of-concept projects, businesses are now focussing on leveraging advanced AI capabilities to achieve tangible results,” Girish Hirde, InfoVision’s global delivery head said.

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Fintech Ruled The Growth Stage Funding Roost 

Surpassing seed-stage ventures in total funding and number of deals, growth-stage startups raised over $3.5 Bn via 282 deals. This was a 21% increase in funding from 2023 levels when the startups in this stage could raise $2.9 Bn in Series A and B or growth rounds. 

The number of growth-stage deals rose 47% YoY to 282. However, unlike the seed stage, media ticket size for growth-stage startups took a 20% hit to $8 Mn in 2024. 

A big chunk of the growth-stage funding pie was taken by the fintech sector. Fintech startups at this stage raised $599 Mn in 42 deals during the year.  

“By 2025, India’s fintech space will find itself navigating a tricky regulatory landscape, but there’s no doubt about the sector’s incredible potential and transformative power. With the total market for fintech solutions in India projected to hit $1.5 Tn in just a year and revenues likely to reach $200 Bn by the decade’s end, the momentum is undeniable,” Anshul Khurana, the cofounder of Entitled Solutions said. 

Meanwhile, the ecommerce sector trailed fintech closely in terms of growth stage funding in 2024. These startups raised $566 Mn in the year across 59 deals. 

Late-Stage Funding Flow Heavy Despite Stagnation Of Mega Deals 

In 2024, late-stage startups raised $7 Bn through 150 deals, registering a 25% YoY increase. The number of such deals also went up by 81% during the year. The uptick came despite a less than satisfactory increase in the number of mega deals in 2024. 

The Indian startup ecosystem could manage only 24 mega deals, which were on par with the 23 deals recorded during the year of the extended funding winter (2023). These mega deals accounted for 38% ($4.6 Bn) of the total funding raised by Indian startups in 2024.

Industry experts maintain that investors refrained from participating in large funding rounds due to inflated valuations of many startups.

Many have highlighted founders’ unrealistic valuation expectations at bigger rounds as a major reason for this stagnation, stating that it now does not bode well for many investors.

Despite this, six startups entered the unicorn stable during the year versus a mere two in 2023. While Rapido became a unicorn in September by netting $200 Mn, Perfios, Moneyview and Ather clinched the coveted tag by raising $80 Mn, $4.6 Mn, and $71 Mn, respectively    

The year also saw many startups embrace the public markets. In total, thirteen startups, including Swiggy, Awfis, MobiKwik, and Unicommerce, made their public market debut this year. 

[Edited By Shishir Parasher]

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