As we move into 2024, Indian startups continue to find themselves in a challenging capital climate. Venture capital firms are getting more selective with their investments. Even with this contraction, a number of promising companies are still looking to raise new rounds of investment to power their expansion. Quick-commerce startup Swish is currently in discussions to raise approximately $15 million, while WhistleDrive aims to secure around $11 million. In a related development, Vodex.ai is in advanced negotiations to raise between $10 million and $15 million.
Premji Invest is said to be in talks to back Digitap, continuing the trend of interest shown by well-resourced investors in promising young companies. SpotDraft is in market for a debt round. This step reflects the broader trend as the funding mocha moves to a more classic financing modality. A number of other companies, including 91squarefeet, Galaxeye.space, R for Rabbit and Biryani by Kilo, are currently in talks to close new rounds of funding. They have gotten deep into the weeds of these conversations.
The broader funding landscape for Indian startups has undergone dramatic changes this year. By comparison, in 2024, there were 1,448 unique funding rounds raised by startups. That’s a notable decrease of 32% from the 2,114 rounds killed in 2023. The overall count of funding rounds topping $100 million has been given a modest lift. This year, we funded 20 rounds, an increase from 18 last year. Investors continued to follow a predictable investment pattern, funneling an almost identical $3.16 billion into Series A and Series B deals. This fiction was blown up when the transactions fell from 420 last year to 387.
Though Indian startups have talked a lot about funding winter, their total funding is 6% up this year. They’ve climbed to a mighty $11.3 billion, $600 million more than 2023. Overall funding received a major increase. Late Stage Startups raised 136 Series C and later rounds for a combined $7.13 billion, due largely to the late stage deal boom. The public markets gave them some hope too, with more than 40 of their peers going public via successful initial public offerings (IPOs). Swiggy’s $1.35 billion listing last month had, interestingly, been the world’s largest tech IPO this year.
Investors remain in a state of cautious optimism as they figure out what the new startup funding climate looks like. Venture capitalists are continuing their trend toward bigger deals in late-stage investments. This change emphasizes the drop in work for early-stage investments, representing a smart strategic shift.