Indian startups raise $3.1 Billion in VC funding in four months even as funding winter continues in the West

Funding winter — a term referring to the reduced capital inflows to startups — has affected the entire ecosystem across the globe since mid-2022. Amid growing geopolitical uncertainties and failure of several storied startups, funding startups seemed to be a risky endeavour for many angel investors venture capitalists.

But now, as the data for initial months of 2024 starts to pour in, the winter seems to be waning, at least in the Indian start-up ecosystem. Indian startups have raised $3.1 billion in venture capital (VC) funding during the first four months of 2024, according to GlobalData. The country has seen year-on-year (YoY) improvement in both the volume and value of VC deals for this period.

From January to April 2024, a total of 375 VC funding deals were announced, with their disclosed value amounting to $3.1 billion. This marks a YoY growth of 1.1% in the number of deals and 13.8% in their value. Analysis of GlobalData’s Deals Database shows that for the same period in 2023, India witnessed the announcement of 371 VC deals, valued at $2.8 billion.


The first quarter of the year itself witnessed two companies — Krutrim AI and Perfios — turn unicorns, and several other late-stage deals were closed at impressive valuations. In all of 2023, only two startups — Zepto and InCred Finance — had turned unicorns.

"It is noteworthy that India, apart from being a key Asia-Pacific country standing just next to China in VC funding activity, is also among the top five markets globally, both in terms of VC funding deals volume and value," says Aurojyoti Bose, Lead Analyst at GlobalData, highlighting India's significant standing in VC funding activity.

Some of the notable VC funding deals announced in India during this period included $300 million raised by Meesho, $216 million by PharmEasy, $103 million by Pocket FM, and $100 million by Shadowfax.

Waning winter may not mean a blockbuster return yet


During the pandemic, many Indian funds amassed significant capital that remained unutilised, creating a substantial amount of "dry powder" or unallocated capital. This, along with renewed enthusiasm about India's growth story, could be the catalysis behind soaring VC funding.

Praising India as a notable exception, Bose said that, “When several of its peer countries were witnessing a fall in either VC deals volume or value, and some countries were also experiencing a decline in both, India emerged as a notable exception to register improvement in terms of volume as well as value.”

However, raising additional capital now faces challenges due to slower implementation of interest rate cuts globally. Moreover, continued funding winter in the West and persistent high inflation in some economies have even stoked fears of a recession. Despite a good start this year, the Indian startup ecosystem still has significant progress to make.

After record startup inflows of $41.6 billion in 2021, funding sharply declined in 2022 and 2023. According to a Tracxn report, inflows dropped to approximately $25 billion in 2022 and further plummeted to a six-year low of $7 billion in 2023, which is just one-sixth of the 2021 figures.

This year, India's share of the global VC funding deals has risen to 6.9% during January to April 2024, while it accounted for 4.1% of the global deal value. However, industry experts point that global funds are not flowing as freely as they did during the pandemic. Although the financial system is showing signs of improvement, the chances of startup funding returning to its previous levels this year are slim.

Funding winter continues in the West

In comparison, startups in most of the Western countries have continued to struggle in terms of VC funding. The UK saw the announcement of 389 VC funding deals worth $3.6 billion during January-April 2024, which is a YoY decline of 21.4% in deal volume and 32.8% in deal value.

The US — a leader in the global startup ecosystem — also witnessed only 1,527 VC funding deals valued at $34.2 billion in the first four months of 2024, compared to 2,922 VC deals of $47.9 billion value during January-April 2023. This marks a YoY decline of 47.7% in the number of deals and a 28.7% decrease in their value.

“Market volatility seems to have impacted the investors’ confidence in VC funding deal making activity in the US. However, despite the decline, the US continued to lead the global VC funding landscape in terms of deals volume as well as value,” remarked Bose.

GlobalData also cautioned that historical data is subject to change if more deals are disclosed later due to delays in making information public.