In the first six months of 2024, venture capital (VC) funding to Indian startups has shown a steady upward trend. Because it increased by 45% compared to the six months from July to December 2023. Indian startups raised a total of $6.4 billion in VC funding in the first six months of 2024. In contrast, $4.4 billion was earned in the second half of 2023, according to the research.
However, compared to the first six months of 2023, the increase was only 1.5%, to $6.3 billion. Overall, the first half of 2024 has positive bearings after VC funding showed a 66% decline in the second half of 2022. This is very good timing in the wake of the long funding winter that engulfed the Indian startup ecosystem after a bullish period.
In fact, for the first six months of 2024, monthly VC funding has been steadily increasing. In the last two months—May and June—VC funding exceeded $1 billion. These developments will see the startup ecosystem end stronger in 2024 and surpass $10.8 billion in 2023.
Among the sectors, fintech and e-commerce saw VC funding in H1 2024, where the fintech segment received a total of $1.4 billion and the e-commerce segment received $1.1 billion. Two notable categories, direct-to-consumer (D2C) and healthtech, raised $523 million and $504 million, respectively. The first six months of 2024 saw a total of 665 deals, but only eight deals exceeded $100 million in total value.
Quick commerce unicorn Septo topped the list with $665 million raised, followed by social commerce unicorn Meesho ($275 million) and omnichannel eyewear retailer Lenskart ($200 million).
Startups like Pharmacy, Capillary Technologies, PocketFM, NephroPlus, and Shadowfax have also crossed $100 million in VC funding. Also, fewer large-value deals are the primary reason VC funding remains modest. Given the current funding winter situation, such high-value deals are few and far between. This is reflected in phase-wise funding, with the late-stage segment receiving $2.4 billion, compared to $1.4 billion in the growth segment. The early-stage funding segment received $1.6 billion and the debt segment received $870 million.
However, the early-stage segment saw the highest number of deals in H1 2024 at 492. In all other categories, the number was below 100—a trend seen over the past two years. In terms of cities, Bengaluru has raised the most VC funding, followed by Mumbai and Delhi-NCR. While this is generally the pecking order, startup hotspots like Chennai, Pune and Hyderabad have also seen VC funding activity.
The next six months of this year are critical for the Indian startup ecosystem if it is to surpass the VC funding figure of 2023.
