The number of funding rounds saw a decline from 167 in January 2023 to 97 in January 2024.
Indian start-ups received $2 billion in funding during the January–March 2024 quarter, as per data platform Tracxn. This was first reported by the Times of India. Interestingly, this was 40 per cent lower than the funding received during the quarter a year ago at $3.3 billion.
If we have to look closely at the numbers, in January 2024, the total funding was $462 million, and it was $776 million in March 2024. Similarly, the number of funding rounds saw a decline from 167 in January 2023 to 97 in January 2024. Between January and March 2024, February saw the highest funding with $798 million and 107 rounds.
The Times of India further says that industry insiders have said that late-stage deals are in the works. For example, as per an Economic Times report, Zepto is seeking fresh funding with a higher valuation.
While there has been a decrease in funding, another trend that has been seen, as per the report, has been that the funding has remained steady and is expected to pick up by H2 this year.
In the last four months, the country has already made two unicorns: Krutrim and Perfios. Krutrim is an AI start-up that was founded by Bhavish Aggarwal, the founder of Ola. The company became a unicorn after it raised $50 million in funding this year in January, led by Matrix Partners. The country’s first AI-led unicorn is valued at $1.02 billion.
Perfios, a B2B SaaS platform, became the second unicorn of the year after the company raised funding of $80 million and the valuation for the same was more than $1 billion. The company said that it intends to use the fund to expand into the global market.
The Indian start-up ecosystem has witnessed a lot, from the default of Byju’s to the crisis at Paytm to a funding winter. According to a report by Bain & Company in collaboration with the Indian Venture and Alternate Capital Association (IVCA), more than 30,000 start-ups shut down in 2023 due to the funding freeze. However, the start-up ecosystem remains robust despite challenges.
"Despite the funding slowdown and economic fluctuations, India's tech startup ecosystem is still one of the top-performing tech ecosystems globally. Even with the slowdown seen in this quarter, we anticipate a bounce back quickly, propelled by government initiatives and a large consumer base comprising the world’s largest young population. India's strong tech ecosystem and demographic advantages promise a bright future and solidify its position as a global tech leader,” said Neha Singh, co-founder of Tracxn, in a report titled ‘India Tech: Quarterly Funding Report, Q1 2024’ by Tracxn.