“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness… it was the season of darkness, it was the spring of hope, it was the winter of despair. “
If you recall these opening lines of “The Tale Of Two Cities”, written by Charles Dickens, you may as well be surprised to find how aptly these fit in the context of Indian startups and how they fared in 2024.
For starters, the homegrown startup ecosystem continued to tremble due to the extended funding winter, which forced many to shut shops and resort to layoffs to cut costs. Then, tight investor scrutiny brought to the fore multiple cases of alleged financial irregularities and lax corporate governance guardrails at Indian startups. As if this was not enough, unit economics, too, remained elusive, making valuation corrections a major theme of the year.
However, standing in the eye of the chaos, we witnessed several glimmers of hope that the worst would soon be over. Funding winter began to recede as founders’ mindsets shifted towards profitability from cash burns.
What also stood out was the spree of fund launches, driven by a shift away from cash-burning practices. VCs and PEs began deploying the dry powder they had accumulated over the years to revitalize the Indian startup ecosystem.
That’s not all. This year has also witnessed 12 IPOs by new-age tech startups, delivering impressive returns to investors and reigniting confidence in the ecosystem. On the unicorn front, we welcomed six startups to the coveted club against a mere two in 2023.
What more? Well, just like every year, we have compiled everything that has impacted the Indian startup ecosystem in 2024, including investments, fund launches, top-level exits, acquisitions, shutdowns, and layoffs and the list is far from over.
With that, we are excited to bring you 11th edition of Inc42’s annual “Year in Review” series — 2024 in review — capturing the highs, lows, and defining moments of the year gone by.
In this series, we will dive into how the Indian startup ecosystem navigated 2024, spotlight the biggest newsmakers, and revisit the year’s most significant controversies.
With that in mind, here’s a quick snapshot of the key milestones, challenges, and achievements that defined the Indian startup ecosystem in 2024.
Profitability Talks Back In Vogue
If there was one clear theme that defined 2024, it was startups talking about profitability. As capital dried up, new-age tech companies reduced cash burn and cut expenses, steering toward sustainable growth.
From OYO to MobiKwik and from HealthKart to InsuranceDekho, a multitude of startups turned profitable in FY24. Additionally, listed startups such as Zomato, PB Fintech, Honasa, and Milk Mantra also turned profitable, raking in hundreds of crores in annual profits.
Frugality emerged as a top priority, with companies like Paytm and Freshworks leveraging artificial intelligence (AI) to streamline operations and cut costs. While these AI-driven efficiencies resulted in significant savings, they also came at the cost of widespread layoffs.
With limited resources, startups piloted new offerings to cater to user demands. New experiments like 10-minute deliveries, GenAI offerings, premiumisation and tailored product offerings remained the flavor of the season.
Funding Numbers Revive
Indian startup funding has been clearly on the mend. As per Inc42 data, Indian new-age tech companies bagged $8.7 Bn in the first nine months of the year, up more than 20% from $7.2 Bn raised in the same period last year.
Startup funding picked up pace in the second quarter only, registering a 24% YoY increase from the $2.5 Bn raised in 206 deals in Q2 2023. The major investor push came in the third quarter and the Indian startup ecosystem ended up raising over $3.4 Bn in 262 deals. This was a 100% increase from the $1.7 Bn raised in Q3 2023 via 205 deals.
Several mega deals materialized throughout the year and India minted six new unicorns in 2024. In contrast, just two startups, Zepto and InCred, entered the $1 Bn valuation club in 2023. Some of the biggest mega rounds in 2024 included the $665 Mn round raised by Zepto, Physics Wallah’s $210 Mn and Rapido’s $200 Mn fundraise.
Meanwhile, Bengaluru, Delhi NCR, and Mumbai retained their positions as top startup hubs, and cities like Pune, Hyderabad, and Chennai emerged as strong contenders.
In what was a sign of a maturing startup ecosystem, as many as 12 Indian new-age tech companies have so far listed on the bourses in 2024 including the likes of giants such as Swiggy, Go Digit, Ola Electric, FirstCry, among others.
Innovation Takes The Front Row
The hullabaloo around capital taps running dry did not stop Indian startups from innovating. As GenAI mania gripped the world, homegrown new-age tech ventures also jumped on the bandwagon and unleashed a new wave of products centered around artificial intelligence.
From creating indigenous and Indic large language models (LLMs) to building practical use cases atop existing LLMs, Indian startups pushed boundaries in the evolving AI landscape.
Invariably, the rise of GenAI also triggered a semiconductor boom. While startups latched on to the low capex fabless chip manufacturing models, legacy giant Tata broke ground on full-fledged semiconductor units across India.
However, it was the success of the quick commerce model that caught the fancy of investors all year round. While Zepto raised more than $1.3 Bn to fuel its 10-minute delivery ambitions, the likes of Zomato-owned Blinkit and Swiggy Instamart saw a surge in orders as India’s urban populace embraced the quick commerce revolution.
Controversies, Layoffs & More…
The year 2024 has not been without its share of challenges. Startups continued to lay off employees in large numbers, driven by AI-led automation and the lingering effects of the funding winter. Many new-age tech ventures also bit the dust as they failed to whip up positive unit economics amid dwindling runways.
In addition, regulatory noose remained tight on startups, making news headlines throughout the year. Be it the Reserve Bank of India (RBI) cracking the whip on Paytm Payments Bank or the Competition Commission of India (CCI) tightening its noose, the year did not make for an easy part for homegrown startups.
Eroding the trust in the ecosystem this year were companies like ReshaMandi, Sustainkart, 1K Kirana, et al, and the most obvious ones like BYJU’S.
Despite these setbacks, innovation and profitability emerged as key themes during the year. Besides a thawing funding winter to a resurgence of IPOs, new unicorns, and fund launches, there is a lot to recall. With this, we bring you Inc42’s 2024 In Review seriesWatch out for this space as we recall how the world’s third-largest startup ecosystem fared in 2024.
[Edited By Shishir Parasher]