Start-up funding sees six per cent surge in funding at 11.3 billion dollars in 2024
BENGALURU: In 2024, the start-up ecosystem saw a marginal 6% increase in funding at $11.3 billion compared to $10.7 billion in 2023. However, this is a 56% decline compared to 2022 as start-ups raised a record $25.4 billion in funding in that year, said SaaS-based market intelligence platform Tracxn in its India Tech Annual Report 2024 on Thursday.
According to the report, in the second half of 2024, start-ups received $5.32 billion across 540 funding rounds, a growth of 8% from H2 2023 where $4.92 billion was raised across 890 rounds.
The report also indicates that in the last quarter of 2024, start-ups raised only $1.8 billion across 219 rounds, and this is the lowest in the last three years. When compared to the same period last year, this is a sharp 47.5% drop from $3.5 billion. This indicates a challenging macroeconomic environment and cautious investor sentiment.
This year saw six start-ups entering the unicorn club compared to just two in 2023. In 2022, the country saw the emergence of 24 unicorns.
Neha Singh, Co-Founder of Tracxn said, “While funding patterns have evolved towards fewer, larger rounds, the emergence of six unicorns, significant IPO activity, and sectoral growth in gig economy, retail and enterprise applications demonstrate the ecosystem's ability to adapt and innovate amidst global challenges."
Quick commerce sector secures $1.37 billion funding
Till December 19 this year, the quick commerce space has seen a significant jump in terms of funding as the sector raised $1.37 billion in equity funding from 7 rounds, driven largely by Zepto, which secured $1.355 billion across three $300 million rounds. The edtech sector raised $620 million from 72 equity funding rounds in YTD 2024, led by Physics Wallah's $210 million funding round.
According to the report, the health tech sector witnessed robust growth, with over 7,000 active companies collectively raising $1 billion, a 133% increase from $438.2 million in 2023.
In 2024, India Tech saw 37 IPOs, a 76.19% increase over 21 IPOs in 2023 and 94.74% higher than 19 IPOs in 2022. The year also saw 20 $100 million+ rounds when compared to 18 such rounds in 2023 and 53 rounds in 2022. As far as cities are concerned, Bengaluru tops with 30.28% of all funding, followed by Mumbai at 27.07%.
Accel, Blume Ventures and Peak XV Partners were the overall top VCs in the start-up ecosystem.