Indian tech startups experienced a significant funding surge in the first half of 2024, raising $4.1 billion, a notable 4% increase compared to the second half of 2023, according to a recent report by Tracxn.
India Holds Strong in Global Tech Funding
Despite challenges, India continues to secure its position as a major player in the global tech startup landscape, ranking as the fourth-highest funded country. The United States leads the pack, followed by the UK and China.
A Closer Look at Funding Trends
The Tracxn report, titled “India Tech Semi-Annual Funding Report H1 2024,” offers detailed insights into the evolving funding trends, sector performances, and significant developments within the Indian tech sector during this period.
- Seed-Stage Funding:
- Increased to $455 million, up 6.5% from H2 2023.
- Down 17.3% compared to H1 2023.
- Early-Stage Startups:
- Steady at $1.3 billion, consistent with H2 2023.
- 28% lower than H1 2023.
- Late-Stage Funding:
- Rose to $2.4 billion, marking a 3.8% increase from H2 2023.
- Slight 1.3% drop compared to H1 2023.
Major Funding Rounds and Notable Investments
Despite a backdrop of fluctuating investments, H1 2024 saw eight significant funding rounds exceeding $100 million each. Highlights include:
- Flipkart’s $350 million Series J round led by Google.
- Apollo 24|7’s $297 million PE round.
- Meesho’s $275 million Series F round.
Emerging Unicorns and Soonicorns
Three new unicorns emerged in H1 2024, a notable rise from none in H1 2023.Additionally, 33 startups joined the ‘Soonicorn’ club, indicating strong potential for future growth.
IPO and Acquisition Activity
The number of IPOs surged to 17 in H1 2024, a significant increase from 6 in H1 2023 and 12 in H2 2023. However, acquisitions in the Indian startup ecosystem declined to 43 in H1 2024 from 75 in H1 2023. Noteworthy acquisitions include:
- PingSafe acquired by SentinelOne for $100 million.
- PureSoftware acquired by Happiest Minds for $94.5 million.
City-Wise and Investor Highlights
- Top Cities: Bengaluru led in total funds raised, followed by Delhi and Mumbai.
- Leading Investors:
- Overall: Accel, Blume Ventures, and Peak XV Partners.
- Seed Stage: Venture Catalyst, Z Nation Lab, and We Founder Circle.
- Early Stage: Peak XV Partners, Alpha Wave Global, and Saama Capital.
- Late Stage: DST Global, Epiq Capital Advisors, and UC-RNT Fund.
- Looking Ahead: Optimism and Growth
Neha Singh, Co-Founder of Tracxn, expressed optimism about the stabilizing funding environment, noting, “India’s robust performance as the fourth-highest funded country in the tech startup ecosystem
Acquisitions and Investor Insights
However, the acquisition landscape saw a downturn with 43 acquisitions in H1 2024, compared to 75 in H1 2023. Noteworthy acquisitions included PingSafe being acquired by SentinelOne for $100 million and PureSoftware by Happiest Minds for $94.5 million.
Among Indian cities, Bengaluru led the way in total funds raised, followed by Delhi and Mumbai. Accel, Blume Ventures, and Peak XV Partners emerged as the top investors in H1 2024. For seed-stage investments, Venture Catalyst, Z Nation Lab, and We Founder Circle were the frontrunners, while Peak XV Partners, Alpha Wave Global, and Saama Capital dominated early-stage investments. DST Global, Epiq Capital Advisors, and UC-RNT Fund were the key players in late-stage investments.
Encouraging Signs of Stabilization
Neha Singh, Co-Founder of Tracxn, noted that despite four consecutive half-year periods of declining funding since H1 2022, signs of stabilization and growth are now evident. “India’s strong performance as the fourth-highest funded country in the tech startup ecosystem is promising. Indian startups are driving economic growth through innovative advancements in retail, enterprise applications, and fintech,” she said.
Looking Ahead
The Indian tech startup ecosystem continues to evolve, showcasing resilience and innovation. With increasing investor confidence and a growing number of successful funding rounds, the future looks bright for Indian tech entrepreneurs.
