In May 2024, Indian Startup Funding faced a setback, marking a decline from earlier signs of recovery earlier in the year. Total funding dropped to $657 million, a 34% decrease from the $1 billion raised in May the previous year. This decline continued from April 2024, with a 24% decrease from $868 million. This downturn marked the worst May for Indian startups since 2020. Despite this, there was an increase in deal count, reaching 100 in May 2024, up 11% from the previous month and 25% from the previous year.
The first quarter of 2024 saw a significant decline in funding for Indian startups, with a 34% year-on-year drop to $2 billion, the lowest in seven years. Notably, growth and late-stage investments suffered the most.
Seed-stage investments remained relatively steady, with $107 million raised across 50 deals in May 2024. This represented a 2% increase from the previous year. Notable seed-stage deals included A91 Partners’ $25 million investment in TechnoSport.
However, growth-stage investments experienced a 30% year-on-year decline to $216 million in May 2024. GreenCell Mobility’s financing of approximately $36.7 million from Sumitomo Mitsui Banking Corporation was among the significant rounds.
One notable bright spot was Atlan’s mega funding deal, securing $100 million in its Series C round co-led by GIC and Meritech Capital. The enterprise tech sector raised $139 million across 14 deals, a decrease from April’s $305 million across 21 deals.
Fintech remained the second highest-funded sector, with $123 million raised across 17 deals in May. Real estate tech emerged as the third highest-funded sector, with $63 million raised, thanks to Infra.Market’s $50 million infusion from Liquidity Group and Mitsubishi UFJ Financial Group’s MARS Unicorn Fund.
In a geographic shift, Delhi NCR surpassed Bengaluru as the highest-funded startup hub, raising $260 million across 28 deals. Mumbai also rose to second place, with $134 million across 24 deals, while Bengaluru fell to third. Chennai dropped below Hyderabad in fifth place, with Hyderabad-based startups raising $56 million across seven deals and Chennai-based startups attracting $32 million across three deals.
Overall, while funding faced challenges in May 2024, there were still notable investments across various sectors, showcasing resilience and ongoing activity in the Indian startup ecosystem.
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