While funding has been continuously sliding since the past, the Indian tech startup ecosystem is now showing signs of recovery. Tech startups raised USD 4.1 bln in the first half of 2024, a 4% increase from USD 3.96 bln raised in H2 2023. spar Central to the data from the India Tech Semi-Annual Funding Report H1 2024 by Tracxn, this sets the end for a two-year decline.
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Though it was a modest rise, the amount of funding still reflects a 13% drop from $4.8 billion raised in 1H 2023 alone. India slipped to fourth place in global tech startup funding, while China advanced, but it remains a significant player behind the US and UK.
Neha Singh, co-founder of Tracxn, commented on the development: “Stabilising after two successive declines since H1-2022,” she said, adding that Indian startups continued to drive economic growth through disruptive innovation across retail, enterprise applications, and fin-tech.
Funding Trend Across Different Stages of Startup Development: The funding trends across different stages of startup development have been explained in the report.
- Seed Stage: Increased to $455 million, a 6.5% increase compared to 2H 2023 but down 17.3% versus 1H 2023.
- Early Stage: Remained flat at $1.3 billion, the same as in 2H 2023, but down 28% compared to 1H 2023.
- Late Stage: $2.4 billion, up 3.8% compared to 2H 2023, though it decreased by 1.3% versus 1H 2023.
Notable Funding Rounds and Sector Performance
Specifically, for eight funding rounds of more than $100 million the first half of 2024 has been announced. The Hop has been strong with Flipkart latest $350 mn Series J funding from Google, Apollo 247 $ 297 mn private equity funding and Meesho $275 mn in its Series F round.
To date, top sectors have been what we call retai enterprise applications and Fintech. I again advising before that sort funding to the retail sector has boosted by 32%, $1. 63 billion as against the value of $1. 23 billion in the initial half of twenty twenty-three. Enterprise applications emerged lower at $933 million from $1. completing reach $60. 04 billion for the first half of 2023. Similarly, funding reduced to half in Fintech compared to $1. 45 billion in H1 2023 to $726 million in H1 2024 as it aims at capturing consumer’s attention by positioning itself amidst these competitors.
In H1 2024 there were have been three new unicorns contrary to H1 2023, and 33 startups have entered the ‘soonicorn’ category. In addition, there was an increase in the initial public offerings to 17 in H1 2024 from 6 in H1 2023 and 12 in H2 2023 Moreover, infrastructure sectors have continued to lead in FDI inflows to India, with telecommunications contributing $0. 8bn and infrastructure and transportation $0. 5bn in H1 2024.
For monetary funding, Bangalore emerged the leading city, while Delhi and Mumbai occupied the second and third places, respectively. Main active Investors in the same period forH1 2024 are Accel, Blume Ventures and PEAK XV Partners. Came from using survey Venturer Catalyst, Z Nation Lab, and We Founder Circle were the most active seed investors, while Early-stage investors were fairly active and those were the Peak XV Partners, Alpha Wave Global, and Saama Capital. Epic and DST global where fairly active in late-stage investments, and other firms where involved equally where, Epiq capital advisors and UC-RNT fund where involved as well.
While the outlook for 2024 H1 does indeed look promising at a time when much needs to be sorted in the tech startup funding ecosystem of India, the ride ahead is bound to be bumpy. Funding has come back, new unicorns have come to the fore, and a decently robust IPO market have all combined to bring cautious optimism back in the future of Indian tech startups.
