Funding winter over? India’s tech startup ecosystem outshines China, Germany with $11.3 billion raised in 2024 

Indian tech and startup ecosystem's long-awaited wait for the funding winter to end seems to have been answered. According to Tracxn’s India Tech Annual Report 2024, India took the third spot globally, ahead of China and Germany in the startup tech ecosystem with $11.3 billion in funding raised. 

In 2024, India’s tech startup ecosystem secured $11.3 billion in funding, a modest 6 percent rise from $10.7 billion in 2023 but a sharp 56 percent drop from 2022. During H2 2024, the technology sector raised $5.32 billion across 540 rounds marking an 8  percent increase from H2 2023's $4.92 billion (890 rounds) but 22 percent lower than H2 2022’s $6.81 billion (1,210 rounds).

The trend points to fewer but larger funding rounds, highlighting shifting investor priorities, as per the India Tech Annual Report 2024 released by Tracxn, one of the globally renowned SaaS-based market intelligence platforms. 

Globally, India ranked third in funding after the United States and the United Kingdom, outpacing China and Germany. The key investors included Accel, Blume Ventures and Peak XV Partners, which led the funding rounds in the India Tech ecosystem.  

Funding scenario

As per the break-up, Venture Catalysts, Z Nation Lab and Blume Ventures dominated seed-stage investments, while Accel, Peak XV and Elevation Capital led early-stage funding. In the late stage, SoftBank Vision Fund, Creaegis and Avataar Ventures emerged as the top investors. 

According to the report, the funding raised in Q4 2024 stood at $1.8 billion across 219 rounds on a year-to-date (YTD) basis, which lowest in the last three years. This represents a sharp 47.5 percent drop from $3.5 billion in Q3 2024 and a 33.3 percent decrease compared to $2.7 billion in Q4 2023. These reflect a challenging macroeconomic environment and cautious investor sentiment, even as Indian tech continues to innovate and attract global attention. 

Commenting on the insights, Neha Singh, Co-Founder of Tracxn said, “The report highlights a year of resilience and recalibration for the Indian startup ecosystem reflected in the modest increase in funding compared to 2023. While funding patterns have evolved towards fewer, larger rounds, the emergence of six unicorns, significant IPO activity, and sectoral growth in the gig economy, retail and enterprise applications demonstrate the ecosystem's ability to adapt and innovate amidst global challenges making India  an international hub for entrepreneurial excellence and innovation.” 

Unicorns on the rise

India’s tech ecosystem witnessed the emergence of six Unicorns in 2024, marking a 200 percent increase compared to two Unicorns in 2023, but a 75 percent decline from 24 Unicorns in 2022.  

On the acquisition front, 113 deals were recorded, representing a 19.3 percent decline from 140 acquisitions in 2023 and a 41.1 percent drop from 192 acquisitions in 2022. The acquisition of iBUS by NIIF for $200 million was the highest-valued buyout in 2024 followed by the acquisition of Loyal Hospitality by Finnest for $160 million. 

VCs take lead 

Among the VCs, India-based Venture Catalysts led the most number of investments in 2024 with 26 rounds, while another India-based fund Blume Ventures added 14 new companies to its portfolio. Late-stage VC investments saw United Kingdom-based SoftBank Vision Fund and India-based Creaegis add two companies each to their portfolios. 

In terms of city-wise funding, Bengaluru, Mumbai and Gurugram emerged as the top three cities. Bengaluru-based tech firms accounted for 30.28 percent of all funding seen by tech companies across India. This was followed by Mumbai at a close second at 27.07 percent. The gig economy, retail, and enterprise applications stood out as top-performing sectors.