 "Startup funding")
Finally, some good news for the Indian startup ecosystem.
After four consecutive half-year periods of declining funding since 2022, the first half (H1) of 2024 has shown an upward trend compared to the second half (H2) of 2023.
According to the India Tech Semi-Annual Funding Report H1 2024 by Tracxn, Indian technology (tech) startups raised $4.1 billion in H1 2024, marking a 4 per cent increase from $3.96 billion in H2 2023. However, this represents a 13 per cent decrease compared to the $4.8 billion raised in H1 2023.
India, which ranked as the fourth-highest-funded country globally in the tech startup landscape, slipped a position as China advanced in the pecking order in terms of raising higher funds.
China raised a total of $6.2 billion in H1 2024, becoming the third-highest funded country. In H1 2023, India had surpassed China to be the third-highest fundraising country globally.
Although China raised more funds, the total number of funding rounds for the period was 327, lower than India’s 540. Additionally, the number of first-time-funded companies in India, at 168, was higher than China’s 159.
The US continued to lead in overall funding volumes, followed by the UK.
Neha Singh, co-founder of Tracxn, commented, “Despite four consecutive half-year periods of declining funding since H1 2022, we are now showing signs of stabilisation and an upward trend. India’s robust performance as the fourth-highest-funded country in the tech startup ecosystem is encouraging. From emerging developments in retail and enterprise applications to pioneering advancements in financial technology (fintech), Indian startups are transforming industries and driving economic growth.”
The funding landscape across different stages showed varied trends: seed-stage funding increased to $455 million, up by 6.5 per cent from H2 2023 but down 17.3 per cent from H1 2023.
Early-stage startups maintained steady funding of $1.3 billion, consistent with H2 2023 but 28 per cent lower than H1 2023.
Late-stage funding rose to $2.4 billion, marking a 3.8 per cent increase from H2 2023, although it experienced a slight 1.3 per cent drop compared to H1 2023.
Despite these challenges, H1 2024 witnessed eight funding rounds surpassing $100 million, including Flipkart’s $350 million Series J round led by Google, Apollo 24|7’s $297 million private equity round, and Meesho’s $275 million Series F round.
The leading sectors in terms of performance in H1 2024 were retail, enterprise applications, and fintech.
Funding in the retail sector increased by 32 per cent, reaching $1.63 billion in H1 2024 compared to $1.23 billion in H1 2023.
The enterprise application sector raised $933 million in H1 2024, a 10 per cent decrease from the $1.04 billion raised in H1 2023.
In the fintech space, funding dropped by 50 per cent, from $1.45 billion in H1 2023 to $726 million in H1 2024.
In H1 2024, three unicorns emerged, a notable increase from zero in H1 2023, along with 33 new additions to the soonicorn club.
The number of initial public offerings also rose to 17 in H1 2024, from six in H1 2023 and 12 in H2 2023.
Bengaluru led in total funds raised during this period, followed by Delhi and Mumbai.
The overall top investors in H1 2024 were Accel, Blume Ventures, and Peak XV Partners (formerly Sequoia Capital India & SEA).
In the seed stage, Venture Catalysts, Z Nation Lab, and WeFounderCircle were the top investors.
Peak XV Partners, Alpha Wave Global, and Saama Capital were the most active early-stage investors in H1 2024.
DST Global, Epiq Capital, and UC-RNT Fund led late-stage investments in H1 2024.
