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Indian tech startup funding rebounds in H1 2024 after two years of decline

Finally, some good news for the Indian startup ecosystem. After four consecutive half-year periods of declining funding since 2022, the first half of 2024 has shown an upward trajectory compared to the second half of 2023.

Indian tech startups raised $4.1 billion in the first half of 2024, a 4 per cent increase from $3.96 billion in the second half of 2023, said the India Tech Semi-Annual Funding Report H1 2024 from Tracxn.

Funding, however, decreased by 13 per cent compared to $4.8 billion raised in the first half of 2023. While India remained the fourth-highest funded country globally in the tech startup landscape, it slipped a position as China moved ahead. The United States led in overall funding volumes, followed by the UK and China.

Neha Singh, co-founder, Tracxn, said, “Despite four consecutive half-year periods of declining funding since H1 2022, we are now showing signs of stabilisation, going upward. 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 fintech, Indian startups are transforming industries and driving economic growth.”

The funding landscape across different stages showcased 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 a steady funding amount 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 saw a slight 1.3 per cent drop compared to H1 2023.

Despite these challenges, the first half of 2024 witnessed eight funding rounds surpassing $100 million, such as 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 rise from none in H1 2023, alongside 33 new additions to the soonicorn club. The number of initial public offerings (IPOs) also rose to 17 in H1 2024, from six in H1 2023 and 12 in H2 2023.

Bangalore emerged as the leader 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. In the seed stage, Venture Catalyst, Z Nation Lab, and We Founder Circle 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 Advisors, and UC-RNT Fund were the leading investors actively involved in late-stage investments in H1 2024. Business Standard

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