Mapping India's VC Funding Landscape: Declines and Bright Spots

India's venture capital (VC) landscape witnessed a subtle performance in the first quarter of 2024, as revealed by a comprehensive report from GlobalData. Despite a marginal decline in both deal volume and value compared to the same period in 2023, the quarter showcased several positive indicators, including month-on-month growth in funding value and the emergence of new unicorns.

Let's have a look into the key findings and insights from the report, shedding light on India's position in the global VC funding arena.

India’s VC deal activity experienced a slight downturn in the first quarter of 2024 compared to the same period in 2023, according to a report by GlobalData, a leading data and analytics company. The country saw the announcement of a total of 288 VC funding deals during Q1 2024, with the disclosed funding value amounting to $2.3 billion. This signifies a year-on-year (YoY) decline of 2% in deal volume and a 3.1% decrease in funding value compared to Q1 2023.

An analysis of GlobalData’s Deals Database revealed that in Q1 2023, India witnessed 294 VC deals, with a total disclosed funding value of $2.4 billion. Despite the marginal decline in Q1 2024, Aurojyoti Bose, Lead Analyst at GlobalData, highlighted some positive indicators.

He said, "Though there was a YoY decline in deal activity, there were some bright spots, including a month-on-month (MoM) improvement in funding value in Q1 2024. The funding value registered MoM growth for two straight months, February and March, even though the volume trend remained fluctuating. In addition, India saw the emergence of the two new unicorns, Krutrim and Perfios, during the quarter."

Emergence of New Unicorns and Big-ticket Deals

During the first quarter of 2024, India welcomed the emergence of two new unicorns, Krutrim and Perfios, adding vibrancy to the startup ecosystem. Additionally, the quarter witnessed several big-ticket VC deals, including a $300 million fundraising by Meesho, $103 million secured by Pocket FM, and $100 million raised by Shadowfax.

India's Position in the Global VC Funding Landscape

India continued to assert its significance in the global VC funding arena.

Bose adds, “India, apart from being a key APAC market, is also a key global market for VC funding activity. It was among the top five markets globally in terms of both VC funding deal volume and value in Q1 2024.”

Despite the decline, India retained its position among the top five markets globally in terms of both VC funding deal volume and value in Q1 2024.

Global Comparison

The decline in India's VC funding activity was relatively moderate compared to other major economies. While India's VC deals decreased to 288 in Q1 2024 from 294 in the same quarter of the previous year, the total funding value marginally dropped from $2.4 billion to $2.3 billion. In contrast, countries like the US experienced substantial declines, with VC funding falling by 35.7% to $24.2 billion and the number of deals dropping by 49% to 1,137.

Despite facing headwinds, India's venture capital landscape demonstrated resilience in the face of global challenges. The emergence of new unicorns and the continuation of significant funding deals underscore the continued vibrancy and potential of India's startup ecosystem. With ongoing innovation and strategic investments, India remains poised to navigate the evolving dynamics of the global VC funding landscape.

While Q1 2024 witnessed a marginal decline in India's VC funding activity, the country's position as a key player in the global VC ecosystem remains robust, signaling promising prospects for future growth and innovation.

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