Funding Rounds in Indian Startups Show Signs of Recovery in April

Indian startup funding roars back to life! April sees recovery in late-stage deals and a surge in growth-stage investments. Despite decline in PE-VC investments, the ecosystem shows resilience with a remarkable spike in overall funding. Read for details.

Swati Dayal
New Update
Startup Funding

In a promising sign for India's burgeoning startup ecosystem, the month of April witnessed a significant uptick in funding rounds within growth and late-stage startups. According to data from analytics firm Venture Intelligence, late-stage funding deals soared to 10 in April, marking a substantial increase from the four deals recorded during the same period last year. Moreover, the total funding in this stage nearly quadrupled, reaching USD 410 million compared to USD 109 million in April 2023.

Resurgence in Growth Stage Deals

April also saw a resurgence in growth stage deals, which had experienced a downturn over the past year. Startups secured funding amounting to USD 159 million in 19 deals, representing a substantial increase from USD 62 million across eight deals in April 2023.

Recovery Amidst Intermittent Improvements

The funding surge comes amidst intermittent improvements observed in the funding landscape over the preceding months of 2024. January witnessed a surge in early-stage deals, followed by an uptick across all stages in February. However, March saw muted funding sentiments despite a slight increase in late-stage activity.

Factors Driving Funding Momentum

Industry experts attribute the resurgence in funding to several factors, including the closure of dormant deals and better alignment on valuation and funding amounts between investors and founders. 

The impact of the funding surge extends to the overall funding landscape of new-age tech companies in India. In April, Indian startups collectively secured USD 726 million across 68 deals, marking a substantial increase from USD 298 million across 43 deals in April 2023, reflecting a remarkable spike of approximately 144 percent.

Decline in PE-VC Investments

Despite the resurgence in startup funding, investments by Private Equity-Venture Capital (PE-VC) firms witnessed a sharp decline. Data released by Venture Intelligence revealed a decrease from USD 5.5 billion in April 2023 to USD 1.7 billion in April 2024, representing a significant drop of USD 3.8 billion.

Year-to-Date (YTD) Performance

On a year-to-date basis, the collective value of PE-VC investments for January-April CY2024 stood at USD 8.1 billion, marking a decline from USD 12.3 billion during the same period in CY2023. Additionally, the total number of deals marginally dipped from 302 to 294 in the Jan-April CY2024 period compared to the previous year.

While the Indian startup ecosystem exhibits signs of recovery with a surge in funding rounds, challenges remain evident, particularly in the realm of PE-VC investments. Nonetheless, the overall momentum suggests a resilient landscape poised for continued growth and innovation.

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