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Late-stage funding climbed to $545 million in April from $171 million a year earlier. In contrast, early-stage funding more than halved to $120 million from $259 million during the period.
“Though overall funding across stages in April 2024 is higher than April 2023, Q1 2023 has witnessed a funding of $3.3 billion, compared to just $2 billion in Q1 2024,” said Neha Singh, cofounder, Tracxn.
“Late-stage funding empowers companies to expand their market reach and scale operations, solidifying their position as an industry leader. Investing in technology, infrastructure, R&D, and top talent is crucial for transitioning to a mature, sustainable, and profitable business,” Singh said.
Growth in late-stage funding last month can be mostly attributed to Meesho and API Holdings raising funds in Series F rounds respectively, she said.
Meesho said in response to queries that it has hired around 300 people in the last six months in addition to 150 campus hires from the 2024 batch.
After the funding spike during the pandemic, investors have turned wary due to macroeconomic conditions and geopolitical instability, said experts.
“Late-stage funding has surged ahead in comparison to early-stage funding as investors are prioritising established companies with proven traction,” Rajat Tandon, President, IVCA said.
For every $1 million invested in India, 47 jobs are created, he said. “Thereby, re-skilling is the need of the hour. Overall, as an industry we anticipate the hiring outlook to see an upward trend,” Tandon said.
Traditional sectors like healthcare, energy, and consumer retail are drawing investor attention.
“Early-stage investments have tapered off due to challenges arising from reduced investments in new-age sectors, compressed valuations, and decreased deal volumes,” Tandon said.
However, Vikram Gupta, founder and managing partner at IvyCap Ventures is of the view that early-stage funding is also improving in 2024. “With more funding in early-stage startups, we are also seeing a rise in hiring compared to 2023,” he said.
“Seed stage and pre-Series A fundings are on a rise with many new entrepreneurs ready to support wannabe founders,” Gupta said.
India’s tech startup ecosystem got the lowest funding in five years in 2023 at $7 billion, dropping the country’s global ranking from 4th to 5th place, according to Singh of Tracxn. Fintech, retail and enterprise applications were the top performing sectors in 2023.
Ashish Sanganeria, senior partner, Transearch India said the startup funding scenario has improved in the last few months.
“Based on our conversation with VCs, this will continue to improve. We have also seen the surge in new search mandates specifically from companies in the SaaS (software-as-a-service) and GCC (global capability centres) space,” he said.
