Summary:
India’s venture capital (VC) sector saw impressive growth in 2024, with a 43% year-on-year rise in funding of Rs. 1,19,437 crore (US$ 13.7 billion), as per a report from Bain & Company and the Indian Venture and Alternate Capital Association (IVCA). This sharp increase was driven by a 45% surge in deal activity, resulting in 1,270 transactions, firmly establishing India as the second-largest Venture Capital and growth capital market in the Asia-Pacific region. Smaller deals under Rs. 435.9 crore (US$ 50 million) made up nearly 95% of all transactions, growing 1.4 times, while larger deals over this amount almost doubled, bouncing back to pre-pandemic figures. High-value mega deals above Rs. 871.8 crore (US$ 100 million) rose 1.6 times, reflecting investor trust in companies that showed resilience through the two year funding slowdown.
Consumer technology, software and Software-as-a-Service (SaaS), including financial technology and generative AI technology accounted for over 60% of total investment. Consumer technology emerged as the frontrunner, raising Rs. 47,077 crore (US$ 5.4 billion), more than twice its 2023 total, driven by standout funding rounds from Zepto (Rs. 12,205 crore/US$ 1.4 billion), Meesho (Rs. 2,397.4 crore/US$ 275 million) and Lenskart (Rs. 1,743.6 crore/US$ 200 million). Software and SaaS attracted Rs. 14,821 crore (US$ 1.7 billion) due to the rising demand for advanced development tools and strong global strategies. Investor confidence soared due to favourable government policies like the abolition of the angel tax, cuts to long-term capital gains (LTCG) tax and easier foreign investor registration. The exit market also flourished, with exits reaching Rs. 59,282 crore (US$ 6.8 billion), largely through a nearly sevenfold jump in IPOs. It also set the base for positioning India’s startup ecosystem as a thriving and mature investment destination. As 2025 approaches, sectors like semiconductors, energy transition and deep tech are set to draw heightened investment interest.
Source: IBEF
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