Tracxn, unveiled its latest report, the Tracxn India Tech 9M 2024. This proprietary report provides comprehensive insights into the Indian ecosystem, covering funding raised by startups, major industry players, and the key trends shaping the landscape.
In 2024 YTD, India Tech secured $7.6B in funding, marking a 7% drop from $8.2B in 2023 and a 66% decline from $22.4B in 2022. The India Tech startup ecosystem ranks 4th globally, behind the US, UK, and China, with over 136K startups and 99 active unicorns. While the region saw peak funding of $29.9B in 2021, funding has since declined due to ongoing geopolitical headwinds and the global funding winter.
According to the report, India's economy has shown resilience in 2024, achieving an 8.2% GDP growth rate for FY24, surpassing earlier estimates and the 7% growth of the previous fiscal year. Government initiatives, including the Startup India Initiative, launched in 2016, continue to support and drive the growth of India's tech ecosystem.
“Despite the broader economic challenges, India’s tech ecosystem continues to demonstrate resilience,” said Neha Singh, Co-founder Tracxn. “The emergence of six new unicorns and a surge in IPOs with 29 tech companies going public in 2024 YTD reflects investor confidence in the sector. While overall funding has slowed, late-stage investments and the increasing momentum in fintech and retail show that innovation-driven growth is still thriving in India’s startup landscape.”
The India Tech ecosystem saw 12 funding rounds exceeding $100M in 2024 YTD, with Zepto raising $1B across two consecutive rounds, making it the only company to secure over $500M this year. In comparison, there were 16 $100M+ rounds in the first nine months of 2023, indicating a slight slowdown in mega funding rounds this year. Other notable startups, including Flipkart, DMI Finance, Apollo 24|7, Meesho, API Holdings, and Rapido, have each raised over $200M in 2024.
Sector Trends and Future Outlook
The majority of funding came from late-stage rounds, which garnered $4.7B, compared to $4.9B in 2023 and $14.3B in 2022. Early-stage funding reached $2.2B, down from $2.5B in 2023 and $6.4B in 2022. Seed-stage funding totaled $743M, compared to $890M in 2023 and $1.6B in 2022.
Retail, FinTech, and Food and Agriculture Tech have emerged as the top-performing sectors. The Retail sector, in particular, attracted $1.95B in 2024 YTD, reflecting a 23% increase from 2023 but a 61% drop from 2022. Flipkart raised $350M from Google, fueling its expansion into quick commerce, while Meesho secured $275M, bringing its total funding to $1.36B across 11 rounds.
FinTech emerged as the second highest funded sector, securing $1.49B, though this represents a 39% decline from $2.46B in 2023 and a 70% drop from $4.97B in 2022. Top-funded companies in the sector include DMI Finance, Credit Saison, Perfios, and Vivifi India Finance. Perfios raised $80M, achieving unicorn status in March 2024. The Food and Agriculture Tech sector saw $1.43B in funding, marking a 63% increase from $880M in 2023, though down 48% from $2.75B in 2022
In 2024 YTD, EdTech and Aerospace, Maritime, and Defense Tech have been the most affected sectors. EdTech funding dropped by 46%, from $215M in 2023 to $116M in 2024, while funding in Aerospace, Maritime, and Defense Tech fell by 56%, from $184M in 2023 to $80.7M in 2024.
India saw six new unicorns marking a 500% increase compared to just one in 2023. IPO activity also surged, with 29 tech companies going public, up from 15 in the same period last year. Notable IPOs include Aeron Composite, Firstcry, Unicommerce, Ola Electric, and RNFI Services. However, acquisitions declined by 36%, with 69 deals in 2024 compared to 107 in 2023. Significant acquisitions include Kitchens-at by Finnest for $160M and PingSafe by SentinelOne for $100M.
Leading investors in the India Tech space include LetsVenture, Accel, and Blume Ventures. At the seed stage, Venture Catalysts, Soonicorn Ventures, and We Founder Circle were the most active, while Peak XV Partners, Elevation Capital, and Accel led early-stage investments. For late-stage funding, key players included Epiq Capital Advisors, DST Global, and UC-RNT Fund.
Bengaluru, Mumbai, and Gurugram emerged as the top-funded cities in India, with Bengaluru alone accounting for over 35% of the total funding in the tech sector.
India's Tech Growth Potential
The 2024 budget introduced key measures to support startups, including the abolition of the Angel Tax on foreign investments, extended tax benefits for startups and sovereign wealth funds until 2025, and a proposed Rs 1,000 crore venture capital fund for the space technology sector. As India is projected to become the world's third-largest economy by 2027 with a GDP exceeding $5 trillion, the country’s large consumer base, young population, and rising urban incomes position it for continued growth.
Global shifts, such as the US and other major economies reducing reliance on China, especially in semiconductors, are expected to increase investment in India. With favorable government policies and a fast-growing economy, India remains a top destination for investors.
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