The Indian tech startup ecosystem has demonstrated a resilient recovery in 2024, following a challenging period marked by a significant decline in funding in 2023. According to a report by Nasscom in collaboration with Zinnov, titled ‘Road to Recovery – Indian Tech Start-up Landscape 2024’, the sector experienced a 23% surge in funding, reaching a total of $7.4 billion. This uptick was accompanied by a 27% increase in the number of deals compared to the previous year, reflecting a cautious yet optimistic investor sentiment.
Challenges in 2023
In 2023, the Indian startup ecosystem faced substantial challenges, including a 63% decline in venture capital funding compared to previous years. This downturn was part of a global trend, with investors becoming increasingly cautious due to high interest rates and geopolitical uncertainties. Despite these challenges, the ecosystem showed resilience, with a focus on improving business fundamentals and profitability.
Recovery in 2024
The recovery in 2024 was characterized by selective investor participation and a focus on sustainable performance and strong fundamentals. The number of newly founded tech startups increased by 2.1 times, bringing the total to an estimated 32,000–35,000 startups. Key sectors such as Retail Tech and Health Tech emerged as frontrunners, exceeding their five-year performance averages. Additionally, nascent sectors like aviation, maritime and defense, and environment tech saw continuous momentum in deal activity.
DeepTech and AI
DeepTech funding experienced a remarkable growth of 78% in 2024, reaching $1.6 billion. This surge was primarily driven by AI-led startups, which accounted for 87% of total DeepTech funding. The median deal sizes in DeepTech startups outgrew those in the broader tech sector across all funding stages2. This trend highlights India’s evolving role from a consumer of cutting-edge technology to a creator and leader in innovation.
Outlook for 2025
Looking ahead to 2025, nearly three-fourths of Indian tech startups remain optimistic about the funding outlook, while around 98% anticipate promising revenue increases. The government’s continued support for the tech industry, coupled with a positive economic outlook, positions India as a premier investment destination. As the global economy strengthens, India’s startup ecosystem is poised for further growth, driven by its strategic resilience and focus on innovation.
In conclusion, the Indian tech startup ecosystem’s measured recovery in 2024 reflects its resilience and adaptability in the face of global challenges. With a strong focus on sustainable growth and innovation, India is set to continue its trajectory as a leading startup hub, driving economic transformation and technological advancements.
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