Will the new year bring better tidings for the startup ecosystem in India by boosting funding of startups and public issues hitting D Street? Well, if industry honchos are to be believed, 2025 could witness such welcome developments. In fact, 2024 marked a revival in both domains and 2025 could see the process accelerate a bit.
“Funding made a comeback in 2024 and more early-stage deals will happen in the next year but there will be no crazy money or super aggressive investors like in 2021-which is good for the ecosystem,” TCM Sundaram, founder and vice chairman of Chiratae Ventures, was quoted in the media as saying.
Promoters exiting startups made $5 bn through OFS in IPOs
According to reports, in the calendar year 2024, startups garnered more than $5 billion by promoters who made (mostly partial) through public issues 99 sale of OFS (Offer for Sale) exercise, secondary deals and block trades. This was a fantastic jump over 2023, when capital of about $0.7 billion made exits from startups. Reports stated that the cumulative funding in the calendar year 2024 rose to $11 billion compared to $9.6 billion in 2023 – a rise of 14.58%.
For example, according to published data, the following amounts were raised through OFS by these IPOs in 2024: Swiggy $808 million, FirstCry $299.2 million, Ola Electric $76.3 million, Blackbuck $66.9 million. “Founders see IPOs as real value unlocking and we are seeing a fundamental shift here where entrepreneurs want to step down from the constant fundraise treadmill, which leads to dilution of their in their shareholding gradually,” Ashish Dave, CEO of Mirae Asset Ventures Investments (India), was quoted in the media as saying.
How funding looked up in 2024
Funding of startups had dipped for 4 consecutive six-month periods since 2022. But the first half of 2024 witnessed the industry bucking the trend compared to the second half of 2023. Reports said that India Tech Semi-Annual Funding Report (for H1 2024) by Tracxn stated that tech startups managed to raise $4.1 billion in H1 2024, signalling a 4% rise from $3.96 billion in H2 2023. However, this also stood for a 13% decline compared to the sum of $4.8 billion that tech startups could raise in H1 2023.
Viewed from another angle, India slipped a rank behind China in tech startup funding. In H1 of 2024, Chinese startups raised $6.2 billion, while India could raise $4.1 billion in the same period.
For any startup, funding is an issue of prime concern. Industry experts feel 2025 is going to be the year when the funding flow will resuscitate, and small IPOs would hit the market in larger numbers making it a bit easier for these ventures to raise capital. Companies Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
