Athira Sethu
Kochi, 10 March 2025
There has been a clear increase in funding for Indian startups over the last few months. This is a change from the earlier “funding winter,” a phrase applied to a time when money was scarce, and most startup founders were finding it difficult.
This optimism arose from the truth that most of the startups possessed sound business plans, concentrating on the development of viable, durable ventures rather than incurring significant cash outflows with no credible strategy. It didn’t last long, however, as funds dwindled massively with the funding collected declining from a high of $200 million mid-July to a low of $42 million towards the close of the month. The figures were some of the lowest during 2023, tracing international economic doubts.
So, where stands the funding today? As per Inc42’s ‘Annual Funding Report 2024,’ Indian startups raised more than $12 billion in 2024, 20% higher than the $10 billion raised in 2023. There were a total of 993 funding deals, up 11% from last year. While the level of funding was comparable to 2020, the figures were much lower than the 2021 and 2022 highs when startups raised $42 billion and $25 billion, respectively.
A fascinating trend is that more funds have been raised via Initial Public Offerings (IPOs). In 2024, there were 13 new technology firms that floated on the market and raised good money. For instance, prominent players such as Swiggy, MobiKwik, and Awfis were among them that floated this year. Such IPOs fuelled expansion, especially in the technology sector.
There has also been a significant rise in the number of startups becoming unicorns (worth more than $1 billion). Six startups entered the unicorn club in 2024, compared to only two in the year before. There was also a surge in funding for later-stage startups, which raised more than $7 billion this year, a 25% increase from last year.
Segment-wise, fintech was the biggest segment for money, drawing over $2.5 billion in funds. The other segments, such as enterprise tech and consumer services, were also on a growth path as their startups drew $1.8 billion worth of funds in each segment. Surprisingly enough, healthtech and cleantech segments reported a surge in investments, primarily due to an increasing adoption of AI technologies for healthcare.
The financing environment in 2024 is one of optimistic caution. Though investment has grown, it’s still not touching the record-breaking levels of 2021 and 2022. Looking into 2025, experts forecast a more sustained and measured rise in the startup ecosystem based on firmer economic foundations and more disciplined behavior by founders and investors alike.
Indian startups raised $1.65 billion in February 2025, which is a 19.5% growth from January. The largest deals involved funding rounds for Oxyzo, the fintech firm, and udaan, the B2B platform. The overall trend is that funding speed is increasing but remains cautious, with investors targeting companies with good, sustainable business models.
