The Indian startup sector seems to be rebounding from downturn as funding reached nearly $7 billion in the first six months of 2024, according to data compiled by funding tracker TheKredible. This marks an increase over the $5.92 billion raised in the same period last year. However, funding is still below the record $20 billion raised in the first half of 2022, showing the peak of funding may be behind us for now.
The current funding consisted of 182 late stage deals totaling $5.4 billion and 404 early stage deals worth $1.54 billion. A further 99 deals did not disclose their values. Encouragingly, two Indian startups – Perfios and Krutrim SI Designs – reached unicorn status in the first half. In comparison, only two startups joined the coveted unicorn club in all of 2023.
When analyzing quarterly trends, June saw nearly $2 billion invested, more than doubling the monthly average of $1 billion through May. Several massive rounds boosted late stage totals, with B2C delivery app Zepto leading with $665 million. Bengaluru remained the top startup hub, attracting $2.83 billion across 253 deals for 40% of total funding. E-commerce claimed the largest segment share at $1.87 billion across 124 startups.
While funding and dealmaking are increasing compared to recent quarters, startups also faced challenges in the first half. Approximately 3,300 employees were laid off, though this is about one-third the number cut in the second half of 2023. Meanwhile, five startups shut down completely in the first quarter. Founder departures also remained elevated at 45 executives leaving their posts.
With growing deal activity and larger rounds for later stage firms, the Indian startup recovery looks to be taking hold after a downturn in 2023. If stock market gains continue fueling risk appetites, venture capital funding could regain momentum through year end and sustain the rebound in 2025. The next few quarters will provide more evidence if recovery is sustained or whether challenges remain for early stage startups and those conserving cash.
