Indian startups regain VCs confidence, funding surges to $13.7 billion in 2024: Report

Indian startups have regained the confidence of the venture capitalists with funding rebounding to $13.7 billion in 2024--an increase of 1.4 times compared to the 2023 levels.

According to the India Venture Capital Report 2025, developed by Bain & Company in collaboration with the Indian Venture and Alternate Capital Association (IVCA), India emerged as the second-largest VC destination in the Asia-Pacific region in 2024.

Indian startups secured 1,270 deals in 2024 compared to 880 in 2023--up 45 percent. The study highlighted that strong domestic fundamentals, progressive regulatory reforms, and rising public market activity led to successful deals.

Notably, small and medium ticket deals (less than $50 million), accounted for 95 percent of the deals. Additionally, deals above $50 million doubled, rebounding to the pre-pandemic levels as high-quality assets attracted deployment. Zepto, Meesho, and Lenskart were among the prominent brands that secured over $50 million deals in 2024.

In contrast, the average size of mega deals, above $100 million fell by 20 percent as investors and founders adopted a more conservative approach.

'Sectors funding'

Tech-first sectors, comprising consumer tech, software, SaaS, and fintech captured more than 60 percent of the VC funding in 2024. Consumer tech became the largest sector with funding rising to $5.4 billion, driven by business-2-consumer (B2C) commerce, travel tech, gaming, and edtech.

“Looking beyond 2025 and at the long term, India’s VC ecosystem is primed for sustained expansion, fueled by consumption tailwinds, progressive regulations, and rapidly advancing digital infrastructure," Prabhav Kashyap, Partner at Bain & Company said. Kashyap has expressed confidence in funding to the green shoot sector companies, added, "semi-conductors, energy transition, and deep tech are poised to attract heightened interest and support".

The VC and growth funding in SaaS, software, and generative artificial intelligence jumped to $1.7 billion in 2024 as more high-quality scaled assets entered the market. The GenAI funding grew 1.5 times in the same year, with application platforms attracting most of the interest.

Furthermore, traditional sectors such as banking and financial services, and consumer/retail, also witnessed sharp funding growth fueled by untapped demand, underlying strengths, and favourable socioeconomic tailwinds.

The fund-raising activity declined by 35 percent to $2.7 billion, the lowest since 2020 due to the accumulation of dry powder (amount of committed, but unallocated capital). Against this backdrop, maiden funds rose in prominence, comprising nearly one-third of the VC/growth capital raised compared to 25 percent in 2023.

The exit activity remained steady in 2024, surging up to $6.8 billion. The Initial Public Offerings (IPOs) surged seven-fold as several venture-backed companies successfully listed last year.

"India's startup ecosystem continues to mature, with a clear shift towards sustainable growth, innovation, and regulatory alignment. The policy reforms introduced in 2024—eliminating the angel tax, simplifying FVCI registrations, easing exits, and ensuring taxation parity —have bolstered investor confidence, setting the stage for a dynamic 2025. As dry powder remains available, we anticipate increased deal activity, particularly in growth-stage investments, fuelling strong consumption trends and supporting an evolving digital economy," added Rajat Tandon, President, IVCA.