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Indian startups attract $4 Bn in funding during September quarter

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Indian startups have shown impressive resilience in the third quarter of 2024, raising over $4 billion. This funding amount is nearly on par with the previous quarter and exceeds the total from the first quarter of the year. The landscape featured several significant deals, including multiple transactions over $300 million and $200 million, along with pre-IPO rounds and secondary market activity. This robust support, especially from early-stage startups, highlights a strong recovery and continued investor confidence, making it one of the most successful quarters during the ongoing funding winter. According to data compiled by TheKredible, Indian startups raised approximately $4.08 billion in funding during the third quarter of 2024. This amount included 85 growth and late-stage deals totaling $3.3 billion, along with 207 early-stage deals worth $754.26 million. Additionally, there were 58 undisclosed deals during this period. Notably, three new unicorns emerged in Q3: Ather, Rapido, and Moneyview. In total, six startups joined the unicorn club in 2024, all based in Bengaluru. In contrast, only two startups reached unicorn status in 2023, while 26 and 44 unicorns were born in 2022 and 2021, respectively. [Y-o-Y and M-o-M trend] In Q3 2024, Indian startups secured 352 deals totaling $4.08 billion, a slight decrease from the $4.27 billion raised across 363 deals in the previous quarter. Over the last seven quarters, Q3 2024 stands out as the second most funded period. Additionally, on a monthly basis, September achieved the second-highest funding with $1.63 billion, trailing behind the peak of $1.92 billion recorded in June. As of now, Indian startups have raised $11 billion in the first nine months of 2024, matching the total amount raised throughout 2023. [Top 10 growth stage deals in Q3] This growth can be largely attributed to Zepto’s remarkable $340 million funding round, closely followed by DMI Finance, which raised $334 million. Other significant contributors included PhysicsWallah, Rapido, Oyo, and Whatfix, each securing substantial funding. Notably, all top 10 growth-stage startups on the list have raised over $100 million each, including Purplle, Drip Capital, M2P Fintech, and InMobi. [Top 10 early-stage deals in Q3] Renewable energy services company BluePine led the early-stage startups with $28.8 million in funding. Following closely were AI firm Nutrix AI, EV companies Kinetic Green and Simple Energy, healthcare startup Even, fintech startup Centricity, and gen-z focused fast fashion D2C brand Newme, all of which made it into the top five. The complete list is available through TheKredible. [Mergers and Acquisitions] Merger and acquisition activity has surged to new heights. According to data compiled by TheKredible, Q3 saw 54 M&A deals, nearly matching the combined total of 55 deals in Q1 and Q2. The top acquisition in Q3 was OYO’s purchase of G6 Hospitality for $525 million, followed by Zomato’s acquisition of Paytm’s movies and ticketing business for $244 million. OYO also acquired Checkmyguest for $27.4 million. Other notable M&A activities included Nazara acquiring Pokerbaazi and Kiddopia, Redcliffe Labs acquiring Celara Diagnostics, HomeLane taking over Design Cafe, and Radio Mirchi’s parent company ENIL acquiring Gaana. [City and segment-wise deals] Bengaluru once again led the pack, with 122 startups from the city raising over $1.38 billion in funding during Q3, representing 34% of the total funding. Following closely, Delhi-NCR-based startups completed 91 deals amounting to $1.3 billion, accounting for nearly 32% of the total funding, putting them not far behind Bengaluru. Mumbai, Hyderabad, Chennai, and Pune were next on the list. Notably, Mumbai-based startups contributed to more than 21% of the total funding in the last quarter. Segment-wise, fintech was at the top with 61 startups raising over $1.15 billion. E-commerce, healthtech, SaaS, and AI startups were next on the list. Amount-wise, automotive tech startups raised more money than SaaS and healthtech. Agritech, foodtech, edtech, and proptech saw their downfall during the first half of 2024. Edtech secured $233 million in funding during the period, with PhysicsWallah alone raising $210 million. Agritech was one of the least funded segments, contributing just 1.39% to the total fundraising, while the electric vehicle (EV) sector accounted for nearly 5% of the total. [Stage-wise deals] In Q3 2024, seed and pre-seed stage startups completed 138 deals totaling over $168 million. Series A and pre-Series A rounds recorded 73 and 37 deals, respectively. Additionally, there were 23 debt funding rounds worth $314 million, contributing 7.72% to the overall total. For more details, check TheKredible. [Layoffs, shutdowns and departures] Layoffs continued to impact the ecosystem in Q3, with 10 companies letting go of more than 1,200 employees. However, this figure is significantly lower than the over 2,200 employees dismissed in Q2. Overall, approximately 4,500 employees received pink slips in the first nine months of 2024. In comparison, this year’s layoffs are notably better than the 24,000 layoffs recorded in 2023 and the 20,000 in 2022. Recent market conditions have led to an increase in business closures. In Q3, eight startups announced their shutdowns, including Koo, Wynk Music, and Greenikk. This figure surpasses the six shutdowns recorded in Q1 and Q2 combined. Meanwhile, the startup ecosystem experienced notable departures of top executives in Q3. According to data, 16 top-level executives, including CEOs, CBOs, CFOs, co-founders, managing directors, and presidents, have resigned. During the period, there were 77 key hirings. The full list can be accessed here. [Trends in Q3 2024] Agritech: Agritech continues to be one of the least funded segments in 2024, with over 30 startups raising only $150 million by September. This trend reflects ongoing challenges, as last year saw just $178 million in agritech funding, a significant drop from $772 million in 2022 and $636 million in 2021. Wealthtech: Wealthtech is witnessing rapid growth, with venture capitalists making significant investments over the past 12 months. According to data intelligence platform TheKredible, Indian wealthtech startups raised over $100 million across five deals in Q3. IPOs from Bengaluru: Following a wave of startup IPOs from Delhi NCR and Mumbai, Bengaluru is making strides in 2024. Ola Electric and Digit Insurance have already been listed, while Ather and Swiggy have submitted their Draft Red Herring Prospectus (DRHP). Additionally, co-working space startup IndiQube is also planning to launch its IPO soon. BharatPe settles with Ashneer Grover: Fintech company BharatPe has resolved its long-standing dispute with former co-founder and managing director Ashneer Grover. This settlement represents a significant development, particularly given the serious nature of the complaints filed by BharatPe against Grover. Titan Capital launches Indicorns: Titan Capital has introduced Indicorns, a new index that showcases profitable startups generating over Rs 100 crore in revenue. This initiative highlights the growing trend of self-sustaining businesses in India, illustrating that startups can achieve profitability without heavily depending on external funding.