31 March 2024 – Despite a sluggish start to the year, Indian startups secured $2 billion in funding during the first quarter of 2024, signaling a significant decline of 33% compared to the previous year. The funding landscape witnessed a downturn, with a notable decrease in mega deals and consolidation activities.
Funding Trends and Analysis
The first quarter of 2024 saw a subdued funding environment, with only three mega deals, reflecting a 58% decline from the same period last year. Late-stage funding observed a substantial year-on-year drop of 53%, while growth stage and seed stage funding also witnessed declines of 13% and 21%, respectively.
Sector-wise Funding Breakdown
Fintech and ecommerce emerged as the frontrunners in fundraising, with fintech securing $460 million across 31 deals and ecommerce startups raising $336 million in 50 deals. Despite a year-on-year decline, these sectors retained their dominance in quarterly funding. Enterprise tech startups followed closely, raising $305 million across 28 deals.
DeepTech and Mergers & Acquisitions
The quarter also witnessed notable funding activity in deeptech, with $140 million secured across 11 deals. However, mergers and acquisitions experienced a sharp decline, with only 15 acquisition deals recorded, marking a 57% year-on-year drop.
Prospects and Forecast
Despite the challenging funding landscape, two startups attained unicorn status during the quarter, hinting at potential opportunities for growth. With Indian investors holding substantial dry powder, the ecosystem anticipates a potential funding boost in the coming quarters. Inc42 forecasts a 36% year-on-year increase in startup funding for the year 2024, based on historical trends spanning the past decade.
