India’s Startup Funding Rebounds; Will the Recovery Last in 2025?
VENTURE CAPITAL (VC) funding in the Indian startup landscape saw a recovery in 2024, signalling the end of the so-called “funding winter” that has shadowed the ecosystem since 2021. Witnessing a marginal revival, the ecosystem saw total investments cross $11.6 billion — a 5.4% jump from $11 billion in 2023. The number of VC deals rose 6% to 1,168 from 1,102, exhibiting confidence in India’s startup ecosystem despite global headwinds.
The year also saw a shift towards profitability and sustainable scaling from the growthat-all-costs strategy seen in the previous years. However, despite a surge in overall funding, growth-stage funding and M&A deals dropped, showing the industry is not fully out of the woods yet. Advertisement India remained the fourth-highest funded country in 2024, with the U.S., the U.K. and China leading the pack. While early- and late-stage funding surged 6.29% and 8.14%, respectively, the seed stage fell 19.36% year-on-year to $1.08 billion. The average value of a VC deal also grew to $10 million in 2024 from $7 million in 2023, while deals valued over $100 million increased to 21 from 14.
Key drivers of funding rebound
The year 2024 also saw sectoral diversification, with investors shifting focus towards high-growth sectors such as fintech, enterprise tech, e-commerce, cleantech, artificial intelligence, healthtech and deeptech. “This diversification broadened the funding landscape and encouraged new industry players to attract substantial investments. Another major contributor was the increase in both seed- and late-stage funding, which rose by 25% and 31%, respectively,” says Madhur Nevatia, partner at Longhouse Consulting, a Careernet company.
Investor confidence up
Startups hired around 178,000 people in 2024, taking the overall headcount to 1.55 million. Recent achievements in space exploration, increased focus on Make in India, rising disposable incomes, and the rapid increase in urbanisation have paved the way for new business models such as quick commerce, which has contributed to increased MORE STORIES activity, says Singh of Tracxn, reiterating that to boost investor confidence, founders are focussing on profitability and unit economics. After significant growth in 2024, startups hope 2025 will be a defining year as investor interest is on the rebound and emerging sectors are set to attract higher investments. “In 2025, AI, climatetech, cleantech, deeptech, spacetech, medtech, along with healthtech, fintech and consumertech are expected to dominate the investment landscape,” says Nevatia of Longhouse.
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