Indian Startups See Record Funding in 2024: What's Driving the Growth? (2024)

• 18 July 2024

The startup landscape is a growth driver of the Indian economy, fueling a wave of innovation and entrepreneurial resilience. The last few years have been tough for startups in terms of funding availability. However, since the start of 2024, there has been a turnaround, with a massive surge in startup funding mainly driven by growth-stage deals.

Read on to learn what factors are fueling the revived investor interest in Indian startups and the implications of this trend for the Indian economy.

What’s Happening?

According to Venture Intelligence, an analytics firm, Indian startups raised $1.6 billion in 62 private equity and venture capital (VC) deals in June 2024. This is significantly higher than the $0.7 billion worth of deals signed in June 2023.

In the first six months of 2024, India received the fourth-largest funding in the tech startup ecosystem, behind the US, UK, and China.

What’s More?

According to the Mint, in June, growth-stage deals accounted for $1.06 billion of the total funding. Notably, Zepto, a quick commerce company, secured a substantial $665 million in a pre-IPO round. Eyewear brand Lenskart and logistics company Ecom Express followed with $200 million and $172 million, respectively.

This surge in funding occurs amidst a global slowdown in investments in growth-oriented new-age tech firms, which has led to challenging times for such companies in India over the past two years.

What’s in it for Investors?

With more than 700 million smartphone users in India, e-commerce firms could majorly benefit from the revived capital inflow into startups. AI and data analytics-oriented businesses are also expected to garner significant investment, as venture capitalists have a positive outlook on the impressive growth potential of AI-integrated firms.

In addition to these sectors, defence, space technology, and semiconductors are expected to witness a significant increase in investments driven by extensive government support.

What’s Next?

Even though investor sentiment has improved slightly, investors are cautious about new-age tech firms. The second half of 2024 will be crucial, as a continuous and sustained rise in investments will be important and will set the tone for future growth.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

*This article is for informational purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer

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