BENGALURU: Tech start-ups have outperformed the projected outlook for 2024, and nearly three-fourths of these start-ups remain optimistic on the funding outlook for 2025, as 98% of respondents anticipate promising revenue increase this year.
Nasscom along with Zinnov on Thursday released a report ‘Road to Recovery – Indian Tech Start-up Landscape 2024’, which said that the Indian tech start-up ecosystem demonstrated resilient progress in CY2024, reflecting a year of measured recovery characterised by selective investor participation, steady funding momentum, and sustained entrepreneurial activity.
In CY2024, the tech start-up ecosystem witnessed a 23% increase in funding, with total tech funding rising to $7.4 billion. The number of deals also saw a 27% uptick compared to CY2023. It also saw a 2.1X increase in newly founded tech start-ups during the year, bringing the total number of Indian tech start-ups to an estimated 32,000–35,000.
The report points out that investors tread cautiously, as they prioritise sustainable performance and strong fundamentals over aggressive capital deployment. In terms of funding by stages, seedstage exhibited the highest growth of 29% (in terms of total funding share), followed by early-stage with 25%, and late-stage with 21% in CY2024 compared to CY2023.
Rajesh Nambiar, President, Nasscom, said, "The growth across mature and emerging sectors, specifically in DeepTech and AI, outlines the Indian tech start-up ecosystem's growing maturity, evolving from being just a hub of opportunities to becoming a strategic force driving India's digital economy. DeepTech start-ups play an increasingly crucial role in shaping India's innovation landscape."
He added, "Our focus now must be on strengthening the foundational pillars of this growth, from enhancing capital access to building robust innovation infrastructure, ensuring our startups can compete globally while solving uniquely Indian challenges."
DeepTech funding in CY2024 grew by 78%, reaching $1.6 billion. Compared to CY2023, the number of deals in DeepTech start-ups increased by 24% in CY 2024. Median deal sizes in DeepTech start-ups outgrew tech start-ups in CY2024 for all the funding stages. Late-stage DeepTech start-ups saw the highest growth of 2.7X in median deal sizes as compared to CY 2023.
The report also said that India added the second highest number of unicorns at six as compared to top global tech start-up ecosystems in 2024, taking the combined valuation of current Indian unicorns to over $220 billion. Unicorns’ share in total funding in CY2024 stood at 33%.