September 16, 2024
Cumulative funding in the Indian start-up sector is set to exceed US$170 billion by the end of 2025, fuelled by the growth of the digital economy
From 2014 to mid-2024, start-ups raised US$151 billion, with projections suggesting this could rise to US$156 billion by year-end
Despite a slowdown in early-stage funding, the start-up sector remains resilient, with many founders turning to bootstrapping and crowdfunding
Tech start-ups are forecast to reach 120,000 by 2025, with internet users expected to surpass 900 million and smartphone users to exceed 1.1 billion by next year
According to a recent report, India’s start-up ecosystem is poised for exponential growth, with the number of start-ups expected to rise by over 2.6 times to 180,000 by 2030. The cumulative funding in the sector since 2014 is projected to surpass US$170 billion by the end of 2025, driven by the rapid expansion of the internet and digital economy.
According to data, Indian start-ups raised US$151 billion in capital from 2014 to the first half of 2024. Despite a slowdown in funding, particularly at the seed and early stages, this figure is anticipated to reach US$156 billion by the end of the year. Start-up activity thrives, with entrepreneurs bootstrapping or leveraging crowdfunding to launch their ventures.
The tech start-up space is expected to grow substantially, with the number of companies in this sector forecast to rise to 120,000 by the end of 2025, up from the current 70,000. This surge is attributed to the increasing penetration of internet and smartphone users. By the end of 2024, the number of internet users is projected to surpass 900 million, up from over 820 million in 2023, while smartphone users are expected to exceed 1.1 billion, marking a 10% growth.
Over the past decade, the start-up ecosystem has experienced a remarkable rise in deal activity. The number of deals increased from 376 in 2014 to 10,500 in the first half of 2024, with the most significant growth occurring between 2020 and 2022. During these years, start-ups raised US$100 billion, a sharp increase from the US$50 billion raised in the previous five years, cementing India’s status as a prime destination for venture capital and private equity investment.
The first half of 2024 saw renewed momentum in the start-up ecosystem. The number of deals increased 16% compared to the second half of 2023, alongside a 20% rise in funding. This growth indicates strong investor confidence and continued expansion in the sector.
Source: Hindu Businessline