BENGALURU : The start-up ecosystem in India witnessed a slowdown in funding in the first quarter of 2024 as it raised only $1.6 billion, a 29% drop compared to the same period last year. Start-ups had raised $2.24 billion in Q1 2023.
According to a report by market intelligence platform Tracxn, late-stage funding has seen the biggest drop this quarter, dropping by over 46% to $0.67 billion in Q1 2024 from $1.25 billion raised in Q4 2023 and dropping by 48% compared to $1.3 billion raised in the same period in Q1 2023
Early-stage funding witnessed an increase of 28%. Out of $1.6 billion in funding, Shadowfax and Credit Saison received the highest funding of over $100 million, with Capillary, Rentomojo, and Captain Fresh also being among the top funded companies.
The quarter saw the emergence of two new unicorns—Perfios and Ola Krutrim. Additionally, IPO numbers surged, with eight tech companies going public, including MediaAssist, WTI, Exicom, and LawSikho. In first quarter of 2023, only two companies went public.
Neha Singh, co-founder of Tracxn, said, “Despite the funding slowdown and economic fluctuations, India’s tech start-up ecosystem is still one of the top-performing tech ecosystems globally. Even with the slowdown seen in this quarter, we anticipate the bounce back quickly, propelled by government initiatives and a large consumer base comprising the world’s largest young population.”
The report added that Retail, FinTech, and Enterprise Applications were the top-performing sectors in Q1 (until March 15) 2024. The retail sector received funding of $494 million, which was a decline of 34% compared to the previous quarter. Enterprise Applications received $448 million funding, a growth of 48% compared to $302 million received in the previous quarter.
Bengaluru emerged as the leader in total funds raised during Q1 (until March 15, 2024, followed by Mumbai and Noida. Venture Catalysts, We Founder Circle, and Titan Capital led the seed investments in Q1 2024, while Peak XV Partners, Saama Capital, and RTP Global were prominent in early-stage investments.