India’s start-up funding in 2024 showcased resilience and maturity as consolidation was seen in the sector, where the funding ecosystem matured beyond hype cycles, embracing sustainability and profitability as key drivers of investment decisions.

“Year 2024 was all about consolidation… not hyped nor underhyped, but a steady year for the ecosystem,” said Dipanjan Basu, co-founder of Bengaluru-based Fireside Ventures.

Start-ups raised $10.3 billion this calendar until November 30, slightly more than $9.6 billion raised during the same period of 2023, data from Venture Intelligence showed. The number of deals closed so far this year fell to 809 from 829 a year back.

For context, venture start-ups in the country raised $24 billion in 2022 while in the go-go period of 2021, local start-ups had mopped up $36 billion.

Early-stage investments this year remained at the same level as 2023 at $1.6 billion, while growth-stage deals increased to $5.2 billion from $4.9 billion.

Growth in number of entrepreneurs

“In the early-stage eco-system, there has been an explosion in the number of ideas and pitch decks,” Ninad Karpe, Founder & Partner, 100X.VC. This has been fuelled by the growing number of entrepreneurs leaving stable jobs to launch new ventures, coupled with increasing participation from angel investors and micro VCs.

However, this influx of capital has introduced some frothiness, as access to funding has become more accessible, leading to inflated valuations for some start-ups.

While early-stage funding has flourished, mid-stage funding remains a significant challenge. There is a noticeable gap in the availability of capital for start-ups between Series A to Series C rounds.

Vikram Ramasubramanian, Partner, Inflection Point Ventures, points out, “There is a gap in mid-stage funding… but debt financing has emerged as an option to help businesses grow.” The lack of sufficient mid-stage investment has forced many start-ups to look at alternative financing options like debt funding to bridge the gap.

Late-stage investments this year saw $3,945-million investment across 74 rounds.

The rate of unicorn addition accelerated in 2024 compared to last year – with start-ups like Rapido, Ather Energy, Moneyview, Perfios and Krutrim raising funds over $1 billion.

Sectoral spotlight: Dominant and emerging players

In 2024, AI, fintech and health tech emerged as dominant sectors, driven by their scalability and critical impact. Meanwhile, deep tech and space tech were the new frontrunners. “These sectors, once considered niche, are now redefining the boundaries of innovation,” noted Ninad from 100x.VC.

Space tech, in particular, has gained traction, bolstered by advancements in technology and government support. “Government initiatives have simplified procurement processes, enabling young entrepreneurs to focus on building scalable businesses,” said Ramasubramanian.

Exits, IPOs and the role of secondaries

The year 2024 emerged as a defining period for start-up exits, with significant momentum across IPOs, strategic acquisitions and secondary market transactions. Several high-profile IPOs captured the spotlight, signalling a growing appetite for public-market-ready start-ups. Swiggy IPO, in particular, demonstrated that consumer-tech companies can thrive in public markets, bolstering investor confidence.

“Swiggy IPO and others have driven public-market confidence, signalling a new era for start-ups,” said Basu of Fireside Ventures.

Industry analysts believe these moves could open doors for other start-ups in traditionally-underrepresented segments. “The IPOs we’ve seen this year are proof that the public markets are ready to embrace a diverse range of start-ups, provided they showcase strong fundamentals and a clear path to profitability,” added Ramasubramanian.

Secondary markets also played a crucial role, offering liquidity to early investors and founders. With tighter valuations and disciplined investing, secondary transactions became an integral part of the start-up lifecycle.

2025 and beyond

As the ecosystem stabilises, the focus will likely shift toward a more disciplined growth and sustainable business models. Experts predict a continuation of trends such as M&A activity, growth-stage funding and further development in sectors like AI, logistics, and agritech.

“2024 has taught founders the importance of scalability and sustainability. These lessons will be invaluable as we move into 2025,” noted Karpe.

Despite challenges like tighter valuations and a cautious mid-stage funding environment, the overall sentiment for 2025 is optimistic. With a wealth of dry powder yet to be deployed, investors and entrepreneurs alike are gearing up for another robust year in India’s dynamic start-up ecosystem.