VC funding in July rises by 103%, crosses $1B mark

Venture Capital (VC) funding into Indian startups on crossed the $1 billion mark on a month-on-month basis for three months in a row, and this augurs well for the ecosystem which seems to be slowly stepping away from the funding winter.

The total VC funding for the month of July 2024 came in at $1.1 billion, which was a 103% rise compared to the same period a year ago where the amount stood at $529 million, according to data from YourStory Research. However, compared to June 2024, there was a decline of 37.5%.

Since the start of the year, VC funding never touched the psychologically important mark of $1 billion, but it changed from the month of May where it reached $1.4 billion. And this trend has continued for the months of June and July.

This benchmark of $1 billion is important for the Indian startup ecosystem as it will boost the overall fund inflow. Given the present environment, the bigger value cheques are still not flowing into the ecosystem.

In the month of July, there were just two deals—Purplle and Rapido—whose value was above the $100 million. In fact, Rapido got the unicorn valuation for this funding round.

Now, the expectation is that the present funding momentum may continue for the remaining part of the year and the Indian startup ecosystem would emerge stronger going into 2025.

Stage-wise funding

In terms of stage-wise funding, the early category continues to see the highest traction, garnering $447 million for the month, followed by growth stage and then the late-stage category. This has been the trend for the last 18 months, and the early-stage funding segment sees the highest activity but the value of money is lower. It is actually the late-stage funding that provides the highest value but this segment has been quite dull right through the year till now.

In fact, this could be seen in the deal transactions for the month of July, where there were just six deals—Oyo, Purplle, Emcure Pharma, Urban Company, Gruner Renewables, and Rapido—which had a deal value of above $50 million.

Unless the late stage segment starts to pick traction, the overall VC funding will continue to remain modest.

Sector funding

In terms of sectors that received the highest funding in the month of July, fintech garnered the highest amount at $145 million, followed by ecommerce at $141, and mobility stood at $120 million. The fintech segment continues to remain the evergreen favourite with the investors and has consistently remained in the top three.

Bengaluru continues to remain the top destination for VC funding as it accounted for $374 million in the month of July. This was followed by Delhi-NCR at $284 million and Mumbai at $248 million.

While the VC activity has largely been centered around these three cities, there have been exceptions from other metros like Chennai, Pune, and Hyderabad.

Now, expectations are slightly higher that the remainder of 2024 would be a better period for funding.