The Indian startup ecosystem continues to show resilience and growth, with seed-stage funding showing a remarkable 31% year-on-year increase, reaching $893 million in 2024. This is part of a broader recovery in the startup landscape, following the corrective phases of 2022-2023. Overall funding for Indian startups has rebounded to pre-COVID-19 levels, amounting to over $12 billion for the year.
PC: Zee Business
According to the latest Inc42 Annual Funding Report 2024, seed-stage funding led the growth, but late-stage funding also saw significant increases, rising 25% to $7 billion across 150 deals. Growth-stage funding increased by 21%, which indicates that investor confidence is broadly distributed across various stages of startups. This balanced recovery indicates that the Indian venture capital ecosystem is becoming more stable, with no single stage dominating the funding landscape.
We are seeing significant growth in seed-stage investments as well,” noted Anup Jain, founding partner of BlueGreen Ventures. “2024 has been a post-correction year for the Indian VC and startup ecosystem, cautiously optimistic from an investor’s standpoint after the recent turbulence.
In 2024, seed-stage startups raised $893 million, a notable increase from $681 million in 2023. However, the number of deals at this stage declined by 7%, with only 433 funding deals completed. This paradox of increasing funding amounts alongside fewer deals can be attributed to a rise in the average ticket size, which increased 25% to $1 million, reflecting a trend towards larger investments in fewer startups.
The best-performing sector at seed stage was enterprise tech, which raised $251 million across 93 deals. Fintech came in second, securing $163 million, while e-commerce startups raised $127 million through 89 deals. The growing adoption of AI technologies has driven investor interest in enterprise tech, with many startups pivoting to incorporate advanced AI solutions into their offerings.
Though seed-stage funding witnessed significant growth, growth-stage companies took the show. They collectively raised more than $3.5 billion through 282 deals – an increase of 21 percent over the same period last year. Fintech emerged as the leader for growth-stage funding and raised $599 million in 42 deals.
Late-stage startups raised $7 billion, at a 25% surge in funding with an 81% boost in deal counts. Mega-deals, however remain unchanged at a low of 24 in the year 2024. This marks a sign that investors are warry of their participation in raising large funding to avoid inflated valuation.
Still, optimism regarding the outlook for Indian startups can be foreseen. Due to significant inflow, as many as six new unicorns came forth in the year 2024; as opposed to merely two from last year. Major highlights from several start-ups – Rapido, Perfios, Moneyview, and Ather made waves for funding that led to unicorns status.
Thirteen other startups also listed their public markets, including well-known names like Swiggy and MobiKwik. The appetite for public listings continues to grow within the startup ecosystem.
The seed-stage funding boom in 2024 testifies to the Indian startup ecosystem’s resilience in the face of recent downturns. Optimistic for the future, with innovation and investor confidence leading the way, Indian startups are poised for a high-octane 2025 as they continue to evolve through the challenges and opportunities of the dynamic market.
