According to a report by market research firm Tracxn, investments in Indian startups totalled $1.6 billion from January 1 to March 15, 2024
Indian startups experienced a notable decline in funding during the first quarter of 2024, marking a departure from the upward trajectory witnessed in previous quarters. According to a report by market research firm Tracxn, investments in Indian startups totalled $1.6 billion from January 1 to March 15, 2024, reflecting a significant 29% decrease compared to the same period last year. Additionally, funding saw a sequential decline of 20% from the previous quarter’s $2 billion.
This downturn in funding comes after three consecutive quarters of growth throughout 2023, signalling a potential shift in investor sentiment and market dynamics within the Indian startup ecosystem.
Despite the overall decrease in funding, there were notable shifts in funding distribution across different stages of startup development. Late-stage funding experienced a substantial decline of over 46%, while early-stage funding witnessed a notable increase of 28%. This shift suggests a potential revaluation of investment strategies, with investors possibly showing a greater inclination towards nurturing early-stage ventures amidst market uncertainties.
India retained its position as the fourth-largest recipient of startup funding globally during this period, trailing behind the United States, China, and the United Kingdom, according to the Tracxn report. Notably, the influx of funding led to the emergence of two new Indian unicorns—fintech firm Perfios and artificial intelligence company Ola Krutrim—illustrating the continued potential for high-growth startups in the Indian market.
In terms of sectoral distribution, retail, fintech, and enterprise applications emerged as the top-funded sectors in Q1, with investments amounting to $494 million, $429 million, and $448 million, respectively. These sectors continue to attract significant investor interest, reflecting ongoing consumer trends and digital transformation initiatives across various industries.
Geographically, Bengaluru emerged as the leading hub for startup funding in Q1, followed closely by Mumbai and Noida. The concentration of funding in these cities underscores the importance of established startup ecosystems and favourable business environments in driving entrepreneurial growth and innovation.
