Executive summary

India’s venture capital (VC) landscape demonstrated resilience and recovery in 2024, with funding rebounding to $13.7 billion—1.4x the 2023 levels. Strong domestic fundamentals, progressive regulatory reforms, and rising public market activity strengthened India’s position as Asia-Pacific’s second largest VC destination, while global funding remained flat.

A rise in deal volumes (880 deals in 2023 vs. 1,270 in 2024, a ~45% increase) led this growth in deal activity. Small- and medium-ticket deals (< $50 million), which made up around 95% of the deals, increased by ~1.4x. $50 million+ deals nearly doubled, rebounding to pre-pandemic levels as high-quality assets attracted deployments (e.g., Zepto, Meesho, Lenskart). The average size of megadeals ($100 million+) fell by 20% as investors and founders shifted toward more conservative valuations. Despite this, 2024 saw five “unicorns” emerge vs. only two in 2023.

Tech-first sectors (consumer tech, software and software-as-a-service [SaaS], and fintech) remained dominant, capturing more than 60% of the total funding. Consumer tech became the largest sector, with funding rising 2.3x to $5.4 billion. Megadeals in business-to-consumer (B2C) commerce, travel tech, gaming, and edtech drove this growth.

Within B2C commerce, quick commerce was a breakout theme. Rapid customer adoption, quickly evolving propositions from leading players, and demonstrated paths to profitability that conferred credibility on the business model fueled this development.

VC and growth funding in software and SaaS, including generative artificial intelligence (AI), rose ~1.2x to $1.7 billion from 2023 to 2024 as international plays matured and more high-quality scaled assets entered the market. Generative AI funding grew ~1.5x during this period, both for generative AI-native start-ups and deployment earmarked for generative AI capability development. Applications and platforms attracted most of the interest, compared to a global focus on more capital-intensive foundational models.

Meanwhile, traditional sectors such as banking, financial services, and insurance (BFSI) and consumer/retail experienced sharp funding growth driven by their underlying strengths, including large addressable markets, untapped demand, and favorable socioeconomic tailwinds.

A diverse mix of investors beyond the leading VCs stepped up in 2024, reflecting a return to the varied investor archetypes seen in 2021 and 2022. Private equity (PE) funds continued to reflect confidence in growth investments (e.g., KKR in Rebel Foods). Family offices and corporate VC firms also stepped up activity, with deal volumes increasing ~1.8x from 2023 to 2024.

Fund-raising activity declined by ~35% to $2.7 billion, the lowest since 2020, as accumulated dry powder continued to loom and deployment remained cautious. Against this backdrop, maiden funds rose in prominence, comprising nearly one-third of the VC/growth capital raised (vs. ~25% in 2023). Some funds targeted specific themes, such as sustainability, agriculture, defense, sports, and gaming.

Exit activity remained steady in 2024, edging up to $6.8 billion. Importantly, public market exits rose from ~55% to ~76% of total exit value over 2023–24. A 7x surge in IPO exit value powered this change, fueled by rising liquidity, recovery in key tech stock valuations, regulatory reforms, and a pent-up IPO backlog.

Overall, in 2024, India’s start-up ecosystem showcased a growing emphasis on profitability, innovation, and regulatory alignment. Policy reforms such as eliminating the angel tax, reducing long-term capital gains (LTCG) tax rates, removing the National Company Law Tribunal (NCLT) process, and simplifying foreign venture capital investor (FVCI) registrations signaled positive momentum for the Indian start-up ecosystem and funding.

Looking ahead to 2025, investors remain confident and have available capital, suggesting potential robust deal activity. Growth-stage investments are set to rise, and emergent sectors—such as semiconductors, energy transition, and deep tech—will likely garner greater interest as the ecosystem evolves and institutional support deepens.

In the longer term, India’s VC ecosystem is poised for sustained growth. Strong consumption tailwinds, regulatory advancements, and a rapidly expanding digital backbone will drive this development.

About IVCA

The Indian Venture and Alternate Capital Association (IVCA), founded in 1993, is a not-for-profit, apex industry body promoting the alternate capital industry and fostering a vibrant investing environment in India. IVCA is committed to supporting the ecosystem by championing regulatory interventions; facilitating advocacy discussions with the Government of India, policymakers, and regulators, resulting in the rise of entrepreneurial activity, innovation, and job creation; and contributing towards the development of India as a leading fund management hub. IVCA represents 430+ funds with a combined India AUM of over US$ 350 billion. Our members are the most active domestic and global VCs, PEs, infrastructure, real estate, and credit funds, limited partners, investment companies, family offices, corporate VCs, hedge funds, and knowledge partners.