Tracxn unveiled its India Tech Annual Report 2024. This proprietary report provides comprehensive insights into the Indian Tech ecosystem, covering funding raised by startups, major industry players, and the key trends shaping the landscape.
In 2024, India’s tech startup ecosystem garnered $11.3 billion in funding, reflecting a marginal 6% increase from $10.7 billion in 2023 but a significant 56% decline compared to 2022. In H2 2024, India Tech received $5.32 billion across 540 funding rounds, a growth of 8% from H2 2023 where $4.92 billion was raised across 890 rounds, but 22% lower than the $6.81 billion raised from 1,210 rounds in H2 2022. The data indicates a shift towards fewer, larger funding rounds, signaling changing investor priorities.
The funding raised in Q4 2024 YTD has been $1.8 billion across 219 rounds, which is the lowest in the last three years. This represents a sharp 47.5% drop from $3.5 billion in Q3 2024 and a 33.3% decrease compared to $2.7billion in Q4 2023. India ranked third in global funding, after only the United States and the United Kingdom, ahead of China and Germany.
These trends reflect a challenging macroeconomic environment and cautious investor sentiment, even as Indian tech continues to innovate and attract global attention.
Commenting on the insights, Neha Singh, Co-Founder of Tracxn said, “The report highlights a year of resilience and recalibration for the Indian startup ecosystem reflected in the modest increase in funding compared to 2023. 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 making India an international hub for entrepreneurial excellence and innovation.”
India’s tech ecosystem witnessed the emergence of 6 Unicorns in 2024, marking a 200% increase compared to 2 Unicorns in 2023, but a 75% decline from 24 Unicorns in 2022. On the acquisition front, 113 deals were recorded, representing a 19.3% decline from 140 acquisitions in 2023 and a 41.1% drop from 192 acquisitions in 2022. iBUS was acquired by NIIF for $200M, becoming the highest-valued acquisition in 2024 followed by the acquisition of Loyal Hospitality by Finnest for $160M.
2024 also saw strong backing from top investors, with Accel, Blume Ventures and Peak XV Partners being the top VCs in the India Tech ecosystem. In the seed stage, Venture Catalysts, Z Nation Lab and Blume Ventures led the way as the top investors, while Accel, Peak XV Partners and Elevation Capital dominated the early stage and SoftBank Vision Fund, Creaegis and Avataar Ventures emerged as the most active in the late stage.
Among VCs, India-based Venture Catalysts led the most number of investments in 2024 with 26 rounds, while another India-based fund Blume Ventures added 14 new companies to its portfolio. Late-stage VC investments saw United Kingdom-based SoftBank Vision Fund and India-based Creaegis add 2 companies each to their portfolios.
In terms of city-wise funding, Bengaluru, Mumbai, and Gurugram emerged as the top three funded cities. Bengaluru-based tech firms accounted for 30.28% of all funding seen by tech companies across India. This was followed by Mumbai at a close second at 27.07%.
Sectoral Trends and Key Insights
Gig Economy, Retail, and Enterprise Applications stood out as top-performing sectors. The Gig Economy recorded $2.2 billion in funding, an extraordinary 414% increase from $420 million in 2023, highlighting its rapid growth and investor confidence. Retail, on the other hand, secured $2.6 billion, reflecting a 13% decline from $3 billion in 2023, indicating market recalibration. Enterprise Applications saw $2.2 billion in funding, an 11% dip from $2.5 billion in 2023, reflecting strategic investment shifts.
Quick commerce emerged as a high-growth sector, with 40 active companies, including Zepto (Unicorn), Dunzo (Soonicorn), and Swish and Farmako (Minicorns). In YTD 2024, 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. Key investors included Goodwater Capital, StepStone Group, and Lightspeed Venture Partners.
India’s EdTech sector remained a cornerstone of innovation, with over 12K active companies identified, including 138 X-Corns. The sector raised $620 million from 72 equity funding rounds in YTD 2024, led by Physics Wallah’s $210 million funding round. Alteria Capital emerged as the most active investor with diverse stage-wise investments.
The Healthtech sector demonstrated robust growth in 2024, with over 7,000 active companies collectively raising $1 billion—a remarkable 133% increase from $438.2 million in 2023. Driving this surge were significant funding rounds by API Holdings ($216 million) and Apollo 24|7 ($297 million). The sector also celebrated a milestone with one IPO during the year, solidifying its position as a standout performer in 2024.
India Tech saw 37 IPOs in 2024, a significant 76.19% increase over 21 IPOs in 2023 and 94.74% higher than 19 IPOs in 2022. Major IPOs included Swiggy, Niva Bupa, BlackBuck, and C2C Advanced Systems. In YTD 2024, India Tech saw 20 $100M+ rounds when compared to 18 such rounds in 2023 and 53 rounds in 2022. Zepto leads the pack with a $665M Series F round led by Lightspeed Venture Partners, valuing the company at over $3.6B. TI Clean Mobility raised $359.29M in a Series D round, while Flipkart secured $350M in a Series J round led by Google, with the company now valued at over $36B. Other notable funding recipients include Mechanic Pro and DMI Finance, contributing to the robust investment landscape in the Indian startup ecosystem.
Strategic Interventions Powering Entrepreneurial Growth
Government policies in 2024 catalysed growth in key sectors like electric mobility, healthtech, and edtech. The PM-eDrive Scheme, worth INR 10,900 crore ($1.28B), aims to accelerate EV adoption and infrastructure, while the National Deep Tech Startup Policy is poised to facilitate long-term funding in AI, robotics, and IoT. The abolition of the Angel Tax in the Union Budget 2024-25 is expected to boost investment activity and entrepreneurship.
Startups recognised by the DPIIT (Department for Promotion of Industry and Internal Trade) have emerged as a significant driver of innovation and job creation. Initiatives like MUDRA Yojana, Stand-Up India Scheme, Mahila E-Haat, and TREAD are fostering women entrepreneurship by providing financial support, marketing platforms, and skill development opportunities. Notably, the ecosystem’s commitment to diversity is evident, with 67,499 DPIIT-recognised startups having at least one-woman director as of June 30, 2024.