Venture capital investments hit $16.7 billion, up 14.1% till November

At $6.50 bn, tech accounted for largest share, followed by consumer discretionary and financial sector

Venture capital (VC) activity in India between January and November 2024 recorded a total value of $16.77 billion across 888 deals, a 14.1 per cent increase in value and a 21.8 per cent rise in deal count compared with $14.69 billion across 729 deals during the same period in 2023, according to Bloomberg data.

 

The technology sector accounted for the largest share of VC funding at $6.50 billion, up 52.5 per cent compared with the corresponding year-ago period. Consumer discretionary followed with $2.30 billion, up 32.2 per cent, while the financial sector attracted $2.20 billion, registering a decline of 0.6 per cent.

   

Notable deals include KiranaKart Technologies (Zepto) at $1.3 billion, Poolside AI SAS at $500 million, and Sterlite Power Transmission at $289 million. 

 

The year has shown signs of a funding revival and industry leaders expect the momentum to continue in 2025.

 

Bhaskar Majumdar, founder and managing partner at Unicorn India Ventures sees a continuation of current trends with more companies heading for initial public offerings (IPOs) and increased activity in later-stage funding rounds. "A lot of funds have been sitting on dry powder and it's only now that they are starting to release," he said.

 

Both 2023 and 2024 were challenging, with global VC investments declining as LPs (limited partners) showed less interest in the asset class. Majumdar said that this trend was now beginning to reverse, with a more favourable environment emerging for “right” deals.

 

Sajith Pai, Partner at Blume Ventures, notes that 2025 is likely to be a year of "great easing" or "great moderation" for the Indian startup ecosystem, growth markets will continue to revive, and IPO activity will remain strong.

 

While there are concerns over the strains on the Indian economy, particularly as it relies heavily on the India1 engine (around 30 million households contributing to half the country’s GDP), Pai is optimistic about the continued flow of funds into capital markets, driven by India1’s savings. This, he believes, will support the startup and tech ecosystem’s IPO activity, helping maintain a mildly positive outlook for Indian startups.

 

Energy transition is opening up opportunities across the value chain, including electric mobility, green hydrogen, and the expanded use of gas as a fuel, said Vivek Soni, Private Equity Leader, EY India. Additionally, sectors like medical devices are gaining traction as healthcare spending rises in India. Traditional sectors such as consumer internet, e-commerce, and fintech, with their various subsets, are also expected to maintain an upswing in investments. "Growth cannot be the only focus. It should be profitable growth. So, you should have unit economics or demonstrate paths to profitability,” he added.

 

The potential impact of the US market, particularly under the incoming Trump administration, remains a key factor influencing global capital flows. With significant investment opportunities in the US, Soni notes that capital is increasingly shifting away from emerging markets. This shift poses both challenges and opportunities for India, as the policies of the new administration could create either headwinds or tailwinds for global risk capital and alternative investments.

 

Over 80 per cent of capital in Indian startups is contributed by global VCs active across both early and growth stages, said Anil Joshi, founder and managing partner, Unicorn India Ventures, adding that domestic capital tends to be more active in early-stage investments.

 

Majumdar also highlighted the growing emphasis on intellectual property (IP)-led businesses, particularly deep tech ventures.

 

“I genuinely believe that deep tech will be a big area of growth for the Indian startup industry and as a fund, we have started to invest a lot,” he said, pointing out emerging areas such as robotics, drones, semiconductor technologies, generative AI, and space tech as key focus areas for investment.

 

Gaurav Chaturvedi, General Partner at Kae Capital, echoed similar views. “We expect AI to still dominate tech conversations, also manufacturing and deep tech-related startups are to be in focus,” he said, adding that "We believe Indian startups may have an edge in some hardware-related business models because of India's growing manufacturing prowess”.