Investors pump $7b into Indian startups in first half of 2024

• 55 mergers and acquisitions took place during the first half of 2024, a decrease from previous years but still showcasing consolidation in the market.
• The year 2021 saw more than 250 mergers and acquisitions which declined to 204 in 2022 and further reduced to 145 in 2023 and likely to hover around 100 in total by the end of 2024.
• Byju’s, ReshaMandi, Swiggy, Ola, Cult.fit, Healthifyme, Scaler and PrepLadder top in terms of laying off employees during the first half.

The Indian startup ecosystem is currently experiencing a phase of recovery, marked by a number of positive trends such as larger funding rounds, an increase in the number of deals, a surge in secondary deals and ESOP buybacks, and a decline in layoffs.

According to data compiled by TheKredible, Indian startups raised almost $7 billion in funding in the first half of 2024 compared to $5.92 billion a year ago but  falling short of the $20 billion raised in first half of 2022, which was considered a golden phase for startups in terms of venture capital inflow.

The $7 billion funding included 182 growth or late-stage deals worth $5.4 billion and 404 early-stage deals worth $1.54 billion. Besides them were 99 undisclosed deals.

A couple of unicorns, Perfios and Krutrim SI Designs, emerged during this period, following a trend where 26 unicorns were created in 2022 and 44 in 2021, compared to only two in 2023.

Bengaluru leads

The increase in startup deals and funding in the first half of 2024 showcases significant growth compared to previous years. Notably, the top 10 startups each raised over $100 million during the first six months of 2024, with late-stage firms such as Zepto, Flipkart, PharmEasy and Lenskart securing hefty funding.

The month of June alone saw nearly $2 billion in funding, more than double the average monthly funding until May. In terms of mergers and acquisitions, there were 55 deals in the first half of 2024, a decrease from previous years but still showcasing consolidation in the market.

The year 2021 saw more than 250 mergers and acquisitions which declined to 204 in 2022 and further reduced to 145 in 2023. It is expected to hover around 100 in total by the end of 2024.

Several stress deals also took place during this period, including acquisitions like ZestMoney by DMI Group and MX Player by Amazon.

Bengaluru continued to lead the pack with 253 startups, raising over $2.83 billion in 2023, followed by Delhi-NCR and other cities contributing significantly to the total funding.

E-commerce startups dominated the segment-wise funding, followed by fintech, healthtech, SaaS, and EV startups. The distribution of funding across different stages of startups in the first half of 2024 showed 266 deals for seed and pre-seed startups, 134 for Series A, and 80 for pre-Series A, along with 58 debt fundings.

Positive trajectory

Despite some sectors seeing a decline in funding, overall, the Indian startup ecosystem appears to be on a positive trajectory in its recovery phase. Segment wise, e-commerce was at the top with 124 startups raising over $1.87 billion.

Fintech, healthtech, SaaS and EV startups were next on the list. Amount wise, EV startups raised more money than SaaS and healthtech. Agritech, foodtech, edtech and proptech saw their downfall during the first half of 2024.

Indian startups saw 3,300 people being laid off during the first half of  2024 which is roughly one-third of the over 9,000 in the second half of 2023 and 15,000 in the first half of 2023.

Byju’s, ReshaMandi, Swiggy, Ola, Cult.fit, Healthifyme, Scaler and PrepLadder topped in terms of laying off employees during the first half. During the first quarter of 2024, five companies – Resso, Rario, OKX India, GoldPe, and Muvin- shut their operations.