The year 2024 saw a recovery from the slowdown witnessed in 2023, with significant investments across sectors. Startups from smaller towns and Tier-2/3 cities gained traction, solving localised problems. Key focus areas included sustainability, scalable solutions and impactful innovations. Policies introduced by the government further supported start-ups in agritech, climate and rural sustainability. Entrepreneurs prioritised creating sustainable and impactful businesses rather than chasing unviable growth.

Climate solutions dominated 2024 as the world focused on addressing pressing environmental challenges. Other high-growth areas included agritech, food security, rural development, and sectors tackling inefficiencies in manufacturing and supply chains.

In 2025, climate investments will continue to grow alongside innovations in food processing, rural credit solutions and deep-tech manufacturing. The government’s emphasis on job creation and sustainability is expected to further catalyse these sectors.

Early, mid and late-stage funding saw increased activity in 2024. However, investors prioritised start-ups offering sustainable and profitable business models. With substantial dry powder still available, 2025 is likely to witness even greater investments. Exits through IPOs, mergers, acquisitions and secondaries have boosted investor confidence, driving more capital into the ecosystem.

Despite positive momentum, challenges persist. Start-ups with unsustainable models may struggle to secure funding as VCs become more selective. Valuations are stabilising and new investments will focus on efficiency, sustainability, and regulatory compliance. Dialogue between government, entrepreneurs and VCs is increasing, creating some uncertainty but also fostering long-term growth.

Founders should focus on building sustainable, value-driven businesses benefiting stakeholders, including customers and employees. Avoid distractions from media hype and maintain a clear, focused path. Profits should align with societal and environmental benefits to ensure long-term success. Staying true to one’s vision is key to standing out in a competitive market.