Silver lining for Indian startups as monthly funding shoots highest since June

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Mint. This comes at a time when tech investors globally have slowed down investments in growth-focused new-age tech firms, resulting in a tough period for such companies in India over the past two years. Reddy added that while deals are happening for such companies, the remaining 70% is still struggling to attract enough confidence from investors, hurting the funding environment. “40% is always the middle—it's tricky, doing well, but people are not getting confidence, and they are not giving more growth capital.

It slows down growth artificially, there is a lot in that zone. They are not at risk of dying, but they are not growing as fast as they should. (The last) 30% don't deserve the valuations or to be alive, or they are going through a tough time," said Reddy.

The increase in funding this month does not, therefore, signify an end to the funding winter, as startups have recorded 26% lower investments in 2024 so far compared to the same period in 2023. About $5.5 billion worth of investments flowed into Indian startups from January to June of 2024, compared to over $7.4 billion during the same period last year. Among top Indian investors, venture capital firms Peak XV Partners and Accel India appear exceptionally cautious, signing only 13 and 10 deals, respectively, so far in 2024, down from an average of about 42 and 26 deals in the same period in the last three years.

Blume Ventures, meanwhile, has topped the charts in most active investors list with 18 deals so far, leaving behind Peak XV and Accel, who have led the race for the past three years. To be sure, investors across the board have cut down on deals. This includes Blume Ventures, which averaged 24 transactions in the last three years.