2024 Recap: A Year of Challenges, Change & Growth for Indian Startups

As the curtain falls on 2024, the Indian startup ecosystem stands as a testament to resilience, innovation, and transformation. This year has been a rollercoaster of breakthroughs, controversies, and bold pursuits, setting the stage for an even more dynamic 2025. From the meteoric rise of AI dominance to the seismic shifts in quick commerce, 2024 delivered a masterclass in adaptation for businesses navigating uncharted waters.

TICE takes a closer look at the highlights of the year.

AI Takes the Spotlight in 2024

Artificial intelligence solidified its place as the crown jewel of innovation in 2024. The Nobel Prize for Physics was awarded to pioneers of artificial neural networks, sparking debates about AI’s interdisciplinary nature. Globally, OpenAI’s release of its reasoning-capable model, o1, reignited public fascination, even as legal battles unfolded between Sam Altman and Elon Musk over the company’s profit motives.

Closer to home, Indian AI startups embraced the frenzy with a distinct swadeshi spirit. Bhavish Aggarwal’s Krutrim announced ambitious plans to develop India’s first AI silicon chips by 2026, allocating ₹135 crore to R&D. This drive aligns with Avendus Capital’s prediction that AI will propel India’s data center growth to 500 MW by 2028. Meanwhile, SaaS giant Zoho doubled down on data sovereignty, unveiling plans to establish data centers worldwide.

Read More: Tech Trends Shaping Indian Startups in 2025: Are Entrepreneurs Ready?

Quick Commerce Growth in 2024

2024 was the year quick commerce truly exploded in India, capturing the essence of instant gratification and transforming the way people shop for everything from groceries to electronics. This sector, promising deliveries in minutes rather than hours or days, saw intense competition, rapid expansion, and significant investment.

Beyond Groceries: Expanding Horizons

Quick commerce players like Zepto, Blinkit, and Swiggy Instamart aggressively broadened their offerings. No longer limited to just groceries, they ventured into delivering clothing, electronics, pharmaceuticals, and even tickets for live events. This expansion reflected a growing consumer appetite for instant access to a wide range of products and services.

• Zepto's Cafe Ambitions: Zepto took a bold step by entering the quick-service cafe segment, offering coffee, snacks, and other ready-to-eat items with its signature speed. This move signaled the potential for quick commerce to disrupt traditional food service models.
• Zomato's Instant Meals: Zomato, the food delivery giant, launched "Zomato Bistro," a service providing freshly prepared meals delivered in minutes. This initiative leveraged Zomato's existing network and customer base to tap into the growing demand for instant meal solutions.

Investment and Consolidation

The quick commerce sector attracted significant investor interest in 2024:

• Zepto's Funding Frenzy: Zepto raised over $1 billion in funding and achieved a valuation of $5 billion, highlighting investor confidence in its potential to dominate the market. This massive influx of capital fueled its rapid expansion and aggressive marketing campaigns.
• Swiggy's IPO Success: Swiggy, the parent company of Instamart, went public with a successful IPO, raising Rs 11,700 crore. This move solidified its market dominance and provided it with the resources to further invest in its quick commerce operations.

Challenges and Casualties

While the sector witnessed remarkable growth, it wasn't without its challenges:

• Dunzo's Struggles: Dunzo, an early pioneer in the quick commerce space, faced severe financial difficulties. Despite its early mover advantage, the company struggled to compete with well-funded rivals, leading to significant layoffs and a scaling back of operations. This highlighted the high costs and logistical complexities associated with quick commerce, particularly in a price-sensitive market like India.
• Profitability Concerns: Despite the hype and investment, profitability remained a challenge for many quick commerce companies. The high costs of delivery, warehousing, and marketing put pressure on margins, raising questions about the long-term sustainability of the business model.

Electric Dreams Get Real

2024 was a year of significant acceleration for the electric vehicle (EV) sector in India, marked by high-profile stock market debuts, increased investor interest, and supportive government policies. However, the journey wasn't without its bumps, with some companies facing challenges and controversies.

Ola Electric's Dramatic Debut

Ola Electric's long-awaited stock market debut was met with mixed reactions. While the company successfully raised significant capital, its initial public offering (IPO) was overshadowed by concerns about its financial performance and customer service. CEO Bhavish Aggarwal's frequent online spats and controversial statements added to the drama, raising questions about the company's leadership and stability.

Ather Energy's Rise

In contrast to Ola's tumultuous journey, Ather Energy enjoyed a smoother ride. The company achieved unicorn status, surpassing a $1 billion valuation, and geared up for its IPO, signaling growing investor confidence in its potential. Ather's focus on premium electric scooters, innovative technology, and a strong brand reputation contributed to its success.

Policy Tailwinds

The Indian government continued to play a crucial role in promoting EV adoption. The PM E-DRIVE Scheme, aimed at incentivizing EV purchases and infrastructure development, provided a significant boost to the sector. Additionally, duty exemptions for critical battery components helped reduce EV production costs, making them more affordable for consumers.

Innovations Driving Mass Adoption

Several innovations emerged in 2024, paving the way for mass EV adoption:

• Battery-as-a-Service (BaaS): MG Motor India introduced a BaaS model, allowing customers to lease batteries separately from the vehicle, reducing the upfront cost of EV ownership and addressing concerns about battery life and replacement costs.
• Charging Infrastructure Expansion: Companies like Tata Power and Reliance Industries invested heavily in expanding EV charging infrastructure, making it more convenient for EV owners to charge their vehicles.
• Battery Swapping Technology: Battery swapping technology gained traction, offering a quick and convenient alternative to traditional charging methods, particularly for commercial vehicles.

Challenges and Opportunities

Despite the progress, the EV sector still faced challenges:

• High Initial Costs: EVs remained relatively expensive compared to their internal combustion engine (ICE) counterparts, limiting affordability for many consumers.
• Range Anxiety: Concerns about limited driving range and the availability of charging infrastructure persisted, particularly for long-distance travel.
• Supply Chain Constraints: Global supply chain disruptions and shortages of critical components like semiconductors impacted EV production.

However, these challenges also presented opportunities for innovation and growth. Companies focused on developing more affordable EV models, improving battery technology, and expanding charging infrastructure to address these concerns.

Fintech Under the Microscope

2024 was a pivotal year for the Indian fintech industry, marked by a dynamic interplay of regulatory scrutiny, innovative breakthroughs, and global recognition. While the Reserve Bank of India (RBI) tightened its grip on compliance, it also introduced progressive measures that opened up new avenues for growth.

Regulatory Tightening and its Impact

The RBI adopted a stricter stance on compliance and risk management in the fintech sector. This led to increased scrutiny of digital lending practices and KYC (Know Your Customer) norms. Payment giants like Paytm Payments Bank faced regulatory action for non-compliance, highlighting the need for fintech companies to prioritize robust risk management frameworks and adhere to evolving regulations.

Progressive Measures Fueling Growth

While tightening regulations posed challenges, the RBI also introduced progressive measures that fostered innovation and growth. The enabling of credit lines on UPI (Unified Payments Interface) was a significant development, allowing users to access credit seamlessly through their UPI accounts. This move is expected to revolutionize credit access and drive financial inclusion.

Success Stories Amidst Challenges

Despite the regulatory hurdles, several fintech companies demonstrated remarkable growth and profitability:

• Razorpay: The payment gateway and business banking platform recorded a fivefold increase in profit, driven by strong growth in its core payments business and expansion into new offerings like neo-banking and lending.
• Policybazaar Parent PB Fintech: The parent company of Policybazaar, an online insurance aggregator, reported stellar earnings, fueled by increasing insurance penetration and the growing adoption of digital channels for insurance purchases.

These success stories underscored the resilience of the Indian fintech sector and its ability to adapt and thrive in a dynamic regulatory environment.

UPI's Global Footprint

2024 witnessed a significant milestone for India's digital payments ecosystem with the international acceptance of UPI. Countries like Singapore and the UAE integrated UPI into their payment systems, allowing users to make seamless cross-border transactions. This marked a major step towards globalizing India's digital payment infrastructure and establishing UPI as a leading player in the international payments landscape.

Read More: How India Is Driving Financial Inclusion Through Jan Dhan Accounts?

Edtech’s Moment of Reckoning

The edtech sector, which experienced phenomenal growth during the pandemic, faced a moment of reckoning in 2024. As schools and colleges reopened, the demand for online learning solutions cooled down, forcing edtech companies to re-evaluate their strategies and adapt to a changing landscape.

Challenges and Setbacks

Several prominent edtech companies faced significant challenges:

• BYJU'S: Once the poster child of Indian edtech, BYJU'S grappled with a series of setbacks. The company faced allegations of aggressive sales tactics, delayed financial reporting, and unpaid salaries. Investor write-offs further eroded its valuation, raising concerns about its long-term sustainability.
• PhysicsWallah: Despite its rapid growth and popularity, PhysicsWallah also faced challenges. The company's aggressive expansion into new markets and product categories led to widening losses, raising questions about its profitability and financial health.

These challenges highlighted the limitations of relying solely on online delivery models and the need for edtech companies to focus on quality content, effective pedagogy, and sustainable business practices.

Glimmers of Hope

Despite the setbacks, some edtech companies demonstrated resilience and innovation:

• upGrad: Ronnie Screwvala's upGrad, focused on higher education and professional development, continued to perform well. The company's emphasis on quality content, industry partnerships, and career outcomes resonated with learners, contributing to its strong financial performance.
• Cuemath: Cuemath, known for its math learning programs, also showed promising growth. The company's focus on personalized learning and strong pedagogical foundation helped it attract and retain students.

These success stories highlighted the importance of differentiation, strong pedagogy, and a focus on learner outcomes in the evolving edtech landscape.

Government Initiatives and Skill-Based Learning

The Indian government's initiatives to boost vocational training and skill development further signaled a shift towards skill-based learning. Programs like the National Education Policy (NEP) 2020 emphasized the importance of integrating vocational training with traditional education, creating opportunities for edtech companies to contribute to this growing segment.

Hiring Highs and Lows

The year 2024 painted a complex picture of the employment landscape, marked by both significant hiring sprees and waves of layoffs. This dichotomy was largely driven by the contrasting fortunes of different sectors and the evolving priorities of companies in a dynamic economic environment.

GCCs and IT Giants Buck the Trend

While many sectors grappled with uncertainty, Global Capability Centres (GCCs) in India continued their aggressive hiring spree. These centers, established by multinational corporations to leverage India's skilled talent pool, remained largely unaffected by global economic headwinds. Major players like JP Morgan, Goldman Sachs, and Accenture continued to expand their operations, creating thousands of jobs in fields like finance, technology, and research and development.

Similarly, Indian IT giants demonstrated resilience and a continued focus on growth. Companies like TCS, Infosys, and Wipro maintained their hiring momentum, driven by robust demand for digital transformation services and cloud solutions. These companies focused on acquiring talent in emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), and cybersecurity.

Read More: Indian Startups Set for Hiring Surge in 2025 Amid Improving Funding

Startups Face a Reality Check

In stark contrast to the buoyancy in the GCC and IT sectors, the startup ecosystem witnessed a wave of layoffs. After a period of rapid expansion and generous funding, many startups faced a reality check in 2024. Rising interest rates, tighter funding conditions, and increased pressure to achieve profitability forced companies to re-evaluate their strategies and prioritize efficiency.

Several high-profile startups, including Freshworks and Pristyn Care, announced significant downsizing. These layoffs often drew criticism, with many accusing these companies of prioritizing shareholder interests over employee welfare. The sudden job losses highlighted the vulnerability of employees in the startup sector, particularly those in non-technical roles.

Crypto’s Wild Ride

2024 proved to be another rollercoaster year for the cryptocurrency market, characterized by dramatic price swings, regulatory hurdles, and evolving narratives. While established cryptocurrencies like Bitcoin flirted with all-time highs, the broader market experienced periods of both euphoria and despair.

Bitcoin's Resilience

Despite facing regulatory uncertainty and macroeconomic headwinds, Bitcoin demonstrated remarkable resilience. The leading cryptocurrency briefly surpassed its previous all-time high, fueled by growing institutional adoption and renewed interest from retail investors. Factors like the approval of Bitcoin ETFs in major economies and increasing concerns about inflation contributed to this renewed optimism.

Challenges for Indian Exchanges

While Bitcoin thrived on the global stage, Indian cryptocurrency exchanges faced a challenging environment. Regulatory uncertainty and scrutiny from authorities continued to plague the industry. WazirX, one of India's largest cryptocurrency exchanges, found itself entangled in legal battles and regulatory hurdles, impacting its operations and user base. This highlighted the need for clearer regulations and a more supportive framework for the cryptocurrency sector in India.

A Year of Losses and Legacies

2024 also witnessed the passing of industrial stalwarts like Ratan Tata, Shashi Ruia, and N Vaghul. Their contributions to business and philanthropy left an indelible mark, inspiring a new generation of entrepreneurs.

As 2024 concludes, the Indian startup ecosystem stands at a crossroads. The year’s events underscored the importance of agility, ethical leadership, and long-term vision in navigating the complexities of modern business. With AI, quick commerce, and EVs leading the charge, 2025 promises to be another landmark year for innovation and resilience in India.

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