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How did Indian startups manage to raise a record-breaking $628M in funding this week?



Indian IT majors are experiencing a significant uptick in deal signings this quarter, signaling a revival in demand after a prolonged slump. More strong deals are expected, driven by the US Federal Reserve’s recent interest rate cut. According to data sourced by ET, the country's leading IT service providers secured at least 33 global deals in July and August. Tata Consultancy Services (TCS) alone announced four major contracts, including deals with Primark, Rolls-Royce, Sydney Marathon, and McDonald’s Philippines in the first two months of the second quarter.

Infosys, which ranked second in deal signings in July, following Cognizant, closed agreements with organizations such as Sector Alarm, Delaware Department of Labor, TDC Net, ServiceNow, Metro Bank, and Finland’s Posti Group. Kumar Rakesh, associate director at BNP Paribas, noted that deal signings have increased in the September quarter, with cost savings being the main focus for enterprises. He also highlighted that the demand for discretionary IT services, which has been stagnant for over five quarters, is expected to rise following the US rate cut.

Additionally, the shorter duration of contracts is likely to boost annual contract value (ACV), which is critical for revenue growth. HCLTech, the third-largest player, signed deals with Xerox and Germany’s apoBank, while Wipro secured three deals, including partnerships with German automotive supplier Mahle and John Lewis Partnership. Tech Mahindra also signed deals with Ooredoo in Doha and aerospace innovator Marshall Group.

Experts acknowledged that while demand is picking up, it remains slow, with smaller, shorter-term contracts dominating. However, some transformative deals have been made that could influence revenues in 2025. Yugal Joshi of Everest Group noted that the recovery in the services industry is delayed, but the recent signings could have a meaningful impact. Larger deals remain limited, as they require significant upfront investment and take time to convert into revenue. Despite the slow pace, enterprises are increasingly focusing on cost-saving contracts, with some resuming transformation projects, benefiting strategic vendors involved in modernization and maintenance services.


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