For startups, securing funding remains a top priority. Industry experts predict that 2025 could be a pivotal year, with an anticipated revival in funding flows and an increase in smaller IPOs entering the market. This trend may provide startups with improved access to capital. Will the new year positively change India’s startup ecosystem, boosting investments and public listings on Dalal Street? According to industry leaders, 2025 holds promise for such advancements. Following a noticeable recovery in these areas during 2024, the momentum will gain further traction in 2025.
“Funding made a comeback in 2024, and more early-stage deals will happen in the next year, but there will be no crazy money or super aggressive investors like in 2021-which is good for the ecosystem,” TCM Sundaram, founder, and vice chairman of Chiratae Ventures, was quoted in the media as saying.
Reports reveal that in 2024, startups secured over $5 billion through various means, including public issues, partial sales via OFS (Offer for Sale) exercises, secondary deals, and block trades. This marked a significant surge compared to 2023 when just raising $0.7 billion through such exits. Additionally, cumulative funding in 2024 climbed to $11 billion, representing a 14.58% increase from the $9.6 billion recorded in 2023.
For example, according to published data, the following amounts were raised through OFS by these IPOs in 2024: Swiggy $808 million, FirstCry $299.2 million, Ola Electric $76.3 million, Blackbuck $66.9 million. “Founders see IPOs as real value unlocking, and we are seeing a fundamental shift here where entrepreneurs want to step down from the constant fundraising treadmill, which leads to dilution of their in their shareholding gradually,” Ashish Dave, CEO of Mirae Asset Ventures Investments (India), was quoted in the media as saying.
Funding trends for startups saw an upturn in 2024. After declining for four consecutive six-month periods since 2022, the first half of 2024 reversed the pattern seen in the latter half of 2023. According to the India Tech Semi-Annual Funding Report (H1 2024) by Tracxn, tech startups raised $4.1 billion during the first half of 2024, reflecting a 4% increase from $3.96 billion in H2 2023. However, this figure also represented a 13% drop compared to the $4.8 billion raised in H1 2023.
From a different perspective, India fell one spot behind China in tech startup funding. During the first half of 2024, Chinese startups secured $6.2 billion, whereas Indian startups managed to raise $4.1 billion in the same timeframe.
