Rewind 2024: AI domination, quick commerce heat, profit chase triumphed Indian startups
In 2024, Indian startups realised the promise of AI, saw the success of burgeoning sectors like quick commerce, and were reigned in by investors to focus on profits.
What a year 2024 has been for the Indian startup ecosystem!
From quick commerce becoming the new gold rush to the Reserve Bank of India (RBI) enforcing due diligence, companies found themselves grappling with the existential dilemma—innovate or die.
The year saw many startups debut on the stock market. Coworking startup Awfis’ IPO set expectations high, ecommerce enabler Unicommerce broke its record, and Mobikwik became India’s second-hottest tech listing ever.
We also had many interesting conversations. Innovative campaigns such as Zomato’s eye-opening job listing for chief of staff got 18,000 applications, while magicpin wanted to hire laid-off employees.
Meanwhile, Infosys co-founder NR Narayana Murthy ruffled many feathers by advocating for 70-hour workweeks. AI startup Greptile’s CEO Daksh Gupta one-upped him with an 84-hour, “no work-life balance” schedule.
In the corporate world, Gautam Adani and his empire were under market pressure battling allegations from Hindenburg Research and an indictment from a US court. The US short-seller Hindenburg also circled in the market regulator, accusing SEBI head Madhabi Puri Buch of having a conflict of interest in investigating the Adani allegations.
This year, we also lost industrial stalwarts. Ratan Tata left behind a legacy of industrial progress and philanthropy. Shashi Ruia, who turned a small construction business into an infrastructure conglomerate, also passed away, as well as veteran banker N Vaghul, who transformed ICICI from a public institution to a private sector bank.
Here’s what made news in 2024:
AI: The next big revolution
AI was on everyone’s mind this year. In fact, the Nobel Prize for Physics was awarded to the creators of artificial neural networks, sparking the debate about whether AI was closer to computer science than physics.
Meanwhile, OpenAI released o1, its first AI model with reasoning capabilities, even as the feud between Sam Altman and Elon Musk over OpenAI’s creation of a for-profit subsidiary snares in court.
Nvidia harked on its first-mover advantage in GPU-accelerated computing, surpassed Intel in annual revenue, and briefly became the most valuable company globally. Meanwhile, data analytics and AI firm Databricks raised the largest venture round in history with a $10 billion scoop.
Back home, the AI craze has a swadeshi temper. Bhavish Aggarwal-led Krutrim aims to develop India’s first AI silicon chips by 2026. The venture is heads-down in R&D, spending Rs 135 crore in research for advancements in AI chips, Krutrim Cloud, and Applied AI.
Indian firms are now more focused on establishing data centres, with Avendus Capital predicting AI will drive India’s data centre growth to 500 MW by 2028. SaaS giant Zoho plans to establish data centres in every country worldwide by the end of this decade.
Quick commerce takes off
Quick food and grocery deliveries took root in the consumer's imagination like never before.
From Zepto, Zomato-owned Blinkit, and Swiggy Instamart diversifying their offerings to include clothing, footwear, and even electronics to ecommerce giants, Amazon and Flipkart, catching up to the 10-minute delivery phenomenon—quick commerce was 2024’s gold rush.
Even Myntra felt the heat and launched its 30-minute delivery service, M-Now, while Nykaa ramped up same-day and next-day delivery.
Many fronts have opened in this battle for quick commerce domination.
Zepto rolled out Zepto Cafe in major cities to offer quick bites and beverages in under 10 minutes. Zomato, too, rolled out Bistro, powered by Blinkit, to dish out instant meals, while Swiggy’s 10-minute food delivery service, Bolt, already accounts for 5% of the company’s total orders.
Dining out isn’t far behind. After acquiring Paytm’s event ticketing vertical, Zomato revamped its dining and entertainment booking app, District, as part of a broader push into the ‘going out segment’. Swiggy, too, is matching every step with the Scenes feature, offering booking and ticketing for live events, concerts, culinary events, and workshops.
Such exponential growth has prompted a search for dark stores, with logistics companies Delhivery and Shadowfax stepping in to capitalise on the surging demand.
With investors closely watching the quick commerce game, Zepto received over $1 billion in funding this year at a $5 billion valuation. Swiggy, which launched its Rs 11,700-crore IPO, raised over Rs 5,000 crore from anchor investors. Its share price is presently 29% over its listing price. Meanwhile, Zomato is getting a pat on its back after a Rs 8,500-crore QIP issue and entering the BSE Sensex.
However, not everyone could taste success. Cash-strapped Dunzo, among the first to jump on the quick commerce bandwagon, has laid off 75% of its workforce as it struggles to repay its creditors.
EVs get real
The electric vehicle segment was buzzing with activity all year round.
Bhavish Aggarwal-led Ola Electric hit the bourses, but customer complaints and the CEO’s online feuds didn’t make it smooth sailing. While the EV two-wheeler maker narrowed its losses and launched new e-scooters with reusable batteries, dropping sales and media reports of it laying off up to 500 employees have certainly raised more eyebrows.
Its competitor Ather Energy—gearing up for a stock market debut—entered the unicorn club after raising over $200 million this year.
The government also pushed for growth in the sector, with Finance Minister Nirmala Sitharaman in the Union Budget 2024 speech proposing a custom duty exemption for 25 critical metals needed for manufacturing Lithium-ion batteries. It also rolled out the PM E-DRIVE Scheme to promote electric mobility and made establishing EV charging stations in India easier.
With MG introducing a first-of-its-kind battery-as-a-service model for its Windsor EV, the investor focus has quietly shifted to lowering battery costs, funding companies like UrjaMobility and Inventus.
Keeping fintechs in line
This year, UPI payments took flight abroad as Malaysia, Singapore, the UAE, and Maldives, started facilitating the instant real-time payment system.
The RBI, meanwhile, had a busy time regulating fintechs.
In a blow to CEO Vijay Shekhar Sharma and Paytm’s stocks, it barred Paytm Payments Bank (PPBL) from accepting deposits or top-ups in customer accounts, prepaid instruments, wallets, etc., over non-compliance and supervisory concerns. The company’s stock fully recovered from the regulatory crackdown eventually, and the company even swung to a profit in Q2.
The central bank also penalised four non-banking financial companies (NBFCs) for charging high interest rates. However, many questioned its fairness.
On the other hand, it also dished out Payment Aggregator and Prepaid Payment Instrument licenses to companies far and wide to enable payment gateways and online merchants to accept payments, as well as enabled small finance banks and companies, including PhonePe, to offer credit lines on UPI.
Overall, the fintech ecosystem continued to grow this year, with Razorpay quintupling its net profit, Amazon Pay India cutting its losses by 39%, PayU growing its revenue driven by increased payment volumes, and Policybazaar parent PB Fintech’s profits soaring on the back of insurance premiums.
Edtech’s downfall
This year, BYJU’s made headlines almost every week. The once edtech behemoth found itself struggling to pay employee salaries and closing down office spaces, while its auditors made a beeline towards the exit, and investors wrote off their investments.
Litigations, court sanctions, and accusations of illegally moving funds have halted BYJU’S from pursuing insolvency and reaching settlements with its lenders.
The industry, too, is still struggling to find its post-pandemic product-market fit. This year saw the closures of Nikhil Kamath- and Kunal Shah-backed business education platform Stoa, and edtech Bluelearn also failing to find the ground.
Alakh Pandey-led PhysicsWallah’s losses widened significantly on the back of rapid expansion, even entering healthcare skilling. Unacademy and its subsidiaries resorted to multiple rounds of layoffs to improve business efficiency.
However, some companies are still bullish. Prosus noted that Eruditus was its only major edtech investment with positive returns. Ronnie Screwvala-led upGrad saw a 50% increase in learner enrollments, and Cuemath reduced its losses by over 40% in FY24.
Meanwhile, skilling became the focus of many companies driven by AI and Gen AI reshaping work dynamics. The government also took a step to facilitate skilling by providing internship opportunities to 1 crore youths and launching a vocational training centre in Mumbai.
Hiring and firing
While some IT companies like Wipro continue on a hiring spree and Global Capability Centres offer new opportunities to freshers and young employees, the startup ecosystem has otherwise downsized as investors double down on profitability.
Buy-now-pay-later startup Simpl and agritech Waycool Foods struggled with their purse strings, while surgery care startup Pristyn Care downsized in hopes of an IPO.
However, some companies came under fire for ‘unethical’ job cuts.
Content creator and 1% Club Co-founder Sharan Hegde was criticised online for allegedly spending on expensive rented space and fixed deposits but laying off 15% of the personal finance platform’s workforce despite being financially strong.
Meanwhile, Freshworks laid off 13% of its workforce, impacting 660 employees, to focus on AI, prompting Zoho’s Sridhar Vembu to argue that a cash-rich company prioritising shareholder buybacks over employee retention cannot expect loyalty. Also, services marketplace YesMadam allegedly firing employees for being stressed did not go down well on social media.
Crypto, emerging tech, and the sun finally rises
While Bitcoin may be tasting new highs in anticipation of Donald Trump returning to the White House, 2024 wasn’t fun for Indian crypto exchanges.
WazirX’s $234-million heist put many investors on the backfoot as the crypto exchange pursued a legal case against hackers who exploited WazirX’s system and transferred wallet control. It also impacted CoinSwitch’s crypto reserves as the crypto exchange used funds from its treasury to replenish users.
However, the year held promise for many sunrise sectors.
Gaming startups, reeling from a high tax rate, saw hope as the government invited them to the table and interacted with them to understand their issues.
For the space tech sector, it approved a Rs 1,000-crore venture capital fund under the aegis of IN-SPACe. Meanwhile, Pixxel scored a NASA contract for hyperspectral Earth observation, Agnikul Cosmos made history with the world’s first 3D-printed rocket engine launch, and Hyderabad-based TakeMe2Space is set to launch an AI lab in space.
Drones brought promise as logistics unicorn Delhivery got approval to incorporate its drone subsidiary to foray into the freight air transportation sector.
And, with Google achieving a quantum computing breakthrough with chips that can solve monumental computations within five minutes, we may be entering a new era of technological marvels in 2025.
Edited by Suman Singh