Report indicates that despite challenges, the startup ecosystem in India continues to thrive.

Despite encountering challenges, India's startup ecosystem remains resilient and primed for recovery, buoyed by governmental efforts and favourable market conditions. In the first quarter of 2024 (until March 15), India witnessed a slowdown, with $1.6 billion raised in funding after experiencing continuous growth in the preceding three quarters of 2023. Although these figures are lower compared to the same period in 2021 and 2022, India secured the fourth-highest global position in terms of funding raised during this timeframe, underscoring the robustness of its entrepreneurial landscape. These insights were gleaned from the 'Geo Quarterly India Tech Report' released by Tracing, a market intelligence platform.

According to the report, the quarter witnessed dynamic funding trends within the tech ecosystem, showcasing varying patterns across different stages. While late-stage funding experienced a notable decline of over 46 percent, early-stage funding saw a significant increase of 28 percent. Notably, out of the $1.6 billion in funding, Shadow fax and Credit Saison received the highest funding of over $100 million each. Additionally, companies like Capillary, Rent mojo, and Captain Fresh were among the top-funded entities. The quarter also witnessed the emergence of two new unicorns, Perfins and Ola Krutrim, highlighting the resilience and potential of India's tech landscape. Furthermore, IPO activity surged, with eight tech companies going public, including Media Assist, WTI, ExCom, and LawSikho, indicating investor confidence in the sector.

The report also underscores that retail, fintech, and enterprise applications were the top-performing sectors in Q1. Retail sector funding totalled $494 million, marking a 34 percent decline compared to the previous quarter; enterprise applications garnered $448 million, representing a 48 percent growth from the previous quarter's $302 million; and fintech received $429 million in funding, showcasing a 48 percent increase from the last quarter's $289 million. The fintech sector's investment growth is fuelled by the rapid rise in smartphone penetration driving the cashless economy, along with favourable regulatory policies that have sustained investor interest.

Overall, there were 20 acquisitions during the quarter, a 33 percent decrease from the last quarter and a 55 percent drop compared to Q1 2023. Notable acquisitions included Pin safe, a cloud security platform, acquired by Sentinel One, and Dibenzo, a fraud risk management platform, acquired by Signy. Eight companies went public in Q1 2024 (until March 15), compared to two in Q1 2023, signalling the increasing maturity of the Indian tech ecosystem.

The report highlights Bengaluru as the leader in total funds raised during Q1 2024 (until March 15), closely followed by Mumbai and Noida, reaffirming the significance of these tech hubs in India's startup landscape. Venture Catalysts, We Founder Circle, and Titan Capital led seed investments in Q1 2024, while Peak XV Partners, Saami Capital, and RTP Global were prominent in early-stage investments. Elev8, Epic Capital Advisors, and UC-RNT Fund led in the late-stage category during this quarter.

Neha Singh, co-founder of Tricin, remarked, "Despite the funding slowdown and economic fluctuations, India's tech startup ecosystem remains one of the top-performing globally. Even with the slowdown observed in this quarter, we anticipate a quick rebound, driven by government initiatives and a large consumer base comprising the world’s largest young population. India's robust tech ecosystem and demographic advantages promise a bright future and solidify its position as a global tech leader."