Despite ongoing funding winter, the Indian start-up ecosystem secured the fourth-highest position globally in terms of funding. However, the ecosystem experienced a slowdown in Q1 2024 (until March 15), with only $1.6 billion raised in funding, following continuous growth in the previous three quarters of 2023.
In the quarter, funding dynamics in the tech ecosystem showed varied trends across different stages. Late-stage funding experienced a significant drop of over 46 per cent, while early-stage funding saw a notable increase of 28 per cent.
Out of the $1.6 billion raised, Shadowfax and Credit Saison received the highest funding, each surpassing $100 million. Additionally, Capillary, Rentomojo, and Captain Fresh were among the top funded companies.
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The quarter also witnessed the emergence of two new unicorns—Perfios and Ola Krutrim.
Moreover, IPO numbers surged, with eight tech companies, including MediaAssist, WTI, Exicom, and LawSikho, going public, indicating investor confidence in the sector.
According to the Q1 2024 (Until 15th March) report by Tracxn, retail, fintech, and enterprise applications emerged as the top-performing sectors. Retail received $494 million in funding, marking a 34 percent decline from the previous quarter. On the other hand, Enterprise Applications saw a growth of 48 percent with $448 million in funding, while fintech received $429 million, a 48 percent increase from the previous quarter.
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The report observed that the seed-stage funding slightly decreased by 7 per cent in Q1-2024, totaling $168 million compared to $180 million in Q4-2023, remaining steady from Q1-2023.
Early-stage funding increased by 28 per cent, reaching $745 per cent in Q1-2024 from $580 million in Q4-2023, yet showing a 3 per cent decrease from Q1-2023's $766 million. Overall, early-stage funding exhibited growth, while seed-stage funding experienced a minor decline.
The quarter witnessed 20 acquisitions, a 33 percent decrease from the previous quarter and a 55 percent drop compared to Q1 2023. Notable acquisitions included Pingsafe by SentinelOne and Difenz by Signzy. Eight companies went public in Q1 2024, compared to two in Q1 2023, indicating the growing maturity of the Indian tech ecosystem, the report added.
Bengaluru emerged top in total funds raised during the quarter, closely followed by Mumbai and Noida. In terms of investments, Venture Catalysts, We Founder Circle, and Titan Capital led seed investments, while Peak XV Partners, Saama Capital, and RTP Global were prominent in early-stage investments. Elev8, Epiq Capital Advisors, and UC-RNT Fund took the lead in the late-stage category.
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