BENGALURU: For the past a few months, venture capital (VC) funding in Indian start-ups have increased and it has helped the total funding to reach $6.53 billion till November 30, 2024.
However, this is a decline of 1.2% in total equity funding compared to 2023 (Jan-Nov) and 67% decline when compared to 2022. Start-ups raised a whopping $19.65 billion total equity funding from VCs across 1,493 rounds in 2022, according to data sourced from market intelligence firm Tracxn.
Meanwhile, private equity (PE) funding in start-ups stood at $4.69 billion in January-November 2024, compared to $4.59 billion in 2023 and $14.95 billion in 2022 during the same period. Zepto raised $665 million in June and in August, it raised $340 million, and these were the top two funding rounds in 2024 so far.
Start-up funding has been showing some signs of recovery of late, and Milan Sharma, Founder and MD, 35North Ventures, said though there has been recovery, it is still below the peak levels of 2021-2022. “Over the past three months, early-stage investments, particularly seed and Series A rounds, have been relatively stable, especially in the US and India. Late-stage funding remains cautious, with constrained valuations.”
Interestingly, Q3 2024 saw 24 new unicorns emerge globally, a small but encouraging uptick.
Experts pointed out that overall, funding has become more selective, but there’s growing confidence compared to the tougher environment of early 2023.
Indian start-ups have raised over $3.4 billion in the last 3 months, which is double the amount raised in the same period last year, informs Manoj Agarwal, Managing Partner, Seafund.
The funding momentum is seeing an uptick across stages. Sectors like deep tech, GenAI, Fintech, SaaS and Q-Comm are leading the pack in terms of bagging funding, he says.
Ankur Mittal, Co-founder, Inflection Point Ventures says the deeptech sector has emerged as a leader in recent financing rounds, with major investments in AI and robotics businesses, indicating an increasing investor demand for innovative technological solutions.
Industry reports also suggest that the number of deals have also gone up significantly as compared to the Y-o-Y comparison and the average cheque size too has grown signalling investors growing confidence and maturity in the ecosystem.
At Seafund, for its second fund they are currently raising Rs 200 crore with an average first investment of Rs 2-5 crore for sectors like AI SaaS, deeptech, Drone, EV & Logistics.