India ranks 4th globally as H1 tech startup funding rebounds to $4.1 bn

Indian tech startups raised $4.1 billion in the first half of 2024 (H1), a 4% increase from $3.96 billion in H2 2023. Though there was a 13% decrease compared to the $4.8 billion raised in H1 2023, India remains the “fourth-highest funded country globally” in the tech startup landscape, according to the latest ‘India Tech Semi-Annual Funding Report H1 2024’ report by market intelligence firm Tracxn.

The U.S. led in overall funding volumes, followed by the U.K. and China. In terms of trends, the funding landscape across different stages shows seed-stage funding increased to $455 million, up by 6.5% from H2 2023 but down 17.3% from H1 2023. Early-stage startups maintained a steady funding amount of $1.3 billion, consistent with H2 2023 but 28% lower than H1 2023. Late-stage funding rose to $2.4 billion, marking a 3.8% increase from H2 2023, although it saw a 1.3% drop compared to H1 2023.

“Despite four consecutive half-year periods of declining funding since H1 2022, we are now showing signs of stabilisation, going upward. India’s robust performance as the fourth-highest funded country in the tech startup ecosystem is encouraging,” says Neha Singh, co-founder, Tracxn.

Though the funding challenges are still persistent in the country, the first half of 2024 saw 8 funding rounds surpassing $100 million such as Flipkart’s $350 million Series J round led by Google, Apollo 24|7’s $297 million PE round, and Meesho’s $275 million Series F round.

Retail, enterprise applications and fintech led the sectors in terms of performance in H1 2024. “Funding in the retail sector increased by 32%, reaching $1.63 billion in H1 2024 compared to $1.23 billion in H1 2023. The Enterprise Application sector raised $933 million in H1 2024, a 10% decrease from the $1.04 billion raised in H1 2023. In the FinTech space, funding dropped by 50%, from $1.45 billion in H1 2023 to $726 million in H1 2024,” says the Tracxn report.

The first half of the fiscal year created three unicorns, which is a rise from none in H1 2023, alongside 33 new additions to the Soonicorn club. The number of IPOs also rose to 17 in H1 2024, from 6 in H1 2023 and 12 in H2 2023.

Some of the top companies that went public included TBO, TGIF Agribusiness, Radiowalla and Trust Systems & S/w.

In terms of acquisitions, the Indian startup ecosystem witnessed a decline, with 43 acquisitions in H1 2024, compared to 75 acquisitions in H1 2023. The key acquisitions included PingSafe, which is being acquired by SentinelOne for $100M, marking the highest-valued acquisition in H1 2024, followed by PureSoftware acquired by Happiest Minds for $94.5 million.

In location, Bengaluru emerged as the leader in total funds raised during this period, followed by Delhi and Mumbai. The overall top investors in H1 2024 were Accel, Blume Ventures and Peak XV Partners.

In the seed stage, Venture Catalyst, Z Nation Lab and We Founder Circle retained the top spot. Peak XV Partners, Alpha Wave Global and Saama Capital were the most active early-stage investors in H1 2024. DST Global, Epiq Capital Advisors and UC-RNT Fund were the leading investors actively involved in late-stage investments in H1 2024.