July 3, 2024: The Indian startup ecosystem is witnessing a robust recovery, marked by significant funding rounds, a surge in secondary deals, ESOP buybacks, and a notable decline in layoffs. According to data compiled by TheKredible, Indian startups raised nearly $7 billion in the first half of 2024, surpassing the $5.92 billion raised in H1 2023. However, this figure is still below the golden phase of H1 2022, which saw an influx of $20 billion in venture capital.
Funding Highlights
The $7 billion raised in H1 2024 included 182 growth or late-stage deals worth $5.4 billion and 404 early-stage deals totaling $1.54 billion, along with 99 undisclosed deals. Notably, two startups, Perfios and Krutrim SI Designs, achieved unicorn status during this period. In comparison, 2023 saw only two unicorns, while 2022 and 2021 witnessed 26 and 44 new unicorns, respectively.
Year-on-Year and Month-on-Month Trends
The increase from $5.92 billion in H1 2023 to $7 billion in H1 2024 reflects a positive trend in the number of deals and the total amount raised. This growth is driven by several $100 million-plus rounds and mega deals secured by late-stage companies such as Zepto, Flipkart, PharmEasy, and Lenskart. June alone saw nearly $2 billion in funding, more than doubling the monthly average of $1 billion up to May.
Top Growth and Early-Stage Deals
Zepto, Flipkart, PharmEasy, and Lenskart led the top growth-stage deals, securing $665 million, $350 million, $216 million, and $200 million, respectively. All startups in the top 10 growth-stage list raised over $100 million each. For early-stage startups, the invite-only networking platform SCOPE topped the list with $90 million, followed by AI startup Krutrim, blockchain startup Avail, e-commerce startup Indkal, and battery tech startup IBC.
Mergers and Acquisitions
The first half of 2024 saw 55 mergers and acquisitions, a decline from previous years. High-profile stress deals included the acquisition of ZestMoney by DMI Group, MX Player by Amazon, Kuvera by CRED, Spartan Poker by OneVerse, and ET Money by 360 One.
City and Segment-wise Funding
Bengaluru led the way, with 253 startups raising over $2.83 billion, accounting for 40% of the total funding. Delhi-NCR followed with 164 deals amounting to $1.3 billion. Mumbai, Hyderabad, and Pune rounded out the top five. Segment-wise, e-commerce dominated, with 124 startups raising over $1.87 billion. Fintech, healthtech, SaaS, and EV startups also saw significant investments.
Stage-wise Deals
In H1 2024, seed and pre-seed stage startups saw 266 deals worth over $457 million. Series A and pre-Series A deals numbered 134 and 80, respectively. There were 58 debt funding deals totaling $784 million and five pre-IPO rounds worth nearly $250 million.
Layoffs, Shutdowns, and Departures
Layoffs significantly declined, with 3,300 people laid off in H1 2024 compared to 9,000 in H2 2023 and 15,000 in H1 2023. High-profile departures included 45 top-level executives. Additionally, six startups shut down in H1 2024, a reduction from over 15 in 2023.
Emerging Trends in Indian Startups
Generative AI and spiritual tech saw a surge in deals, with AI startups raising $237 million and spiritual tech startups securing over $36 million. Established fashion brands also raised their maiden institutional rounds, with significant investments in TechnoSport, Libas, and Rare Rabbit.
While the peaks of H1 2022 might take some time to be reached again, the Indian startup ecosystem is on a promising path. The stability in government and booming stock markets are likely to drive further funding, with investors redeploying gains from successful IPOs. The return of VCs and family offices to the startup funding market signals a bright future for the next wave of innovative startups.
