As we near the end of 2024 (only literally, not metaphorically), what could be said of India’s startup ecosystem? What about India’s VC ecosystem, if VC includes seed to Series F investments in companies less than 10 years old and late-stage tech investments?
According to Venture Intelligence, Indian startups raised close to $11 billion until December 13 2024, compared to roughly $9.5 billion raised in 2023.
And it’s said that the Indian startup ecosystem received about $9.2 billion in VC funding during the first 10 months of 2024, which is said to be an approximate 45% YoY increase from about $6.4 billion in the same period in 2023. Boom! Looks like that funding winter might be thawing a tad bit.
What were 2024’s top startups in India by value, as of November 30th 2024?
And what were 2024’s top VC investments in India, as of November 30th 2024?
Some might have predicted Zepto as the top startup by value in 2024, having raised close to $1.4 billion, to top the list with the name dominating the news for its funding rounds and some potential allegations and controversies, as well. So, the quick commerce boom is really taking off this year, especially with new entrants, some already firmly established, venturing into the q-comm realm. The whole “ultra-fast delivery + hyperlocal dark stores” already seems to have majorly disrupted kirana stores, while also being seen as preferable for FMCGs.
With Zepto seeming to dominate the business headlines this year, it might make sense that Zepto received some of the top VC investments this year, receiving investments from some global players, especially if it’s aiming to hit profitability in FY2026. Plus, the q-comm market in India seems to have really exploded, which is why so many established players might be getting into this space to try to play their hand. It might be interesting that even while Amazon or Flipkart seem to have dominated the e-commerce market in India, Zepto seems to have carved out some degree of differentiation to get that level of VC interest, which is why these two big dogs might be getting in on the action. Maybe, VCs might be seeing Zepto as the future of e-commerce, so 2025 might see increased investor interest in those who hyperlocalize their supply chains.
And a lot of this data might make some infer that VC is paying more attention to consumer-focused tech startups, be it Zepto or Meesho or PharmEasy or Healthkart or Physics Wallah or others. Maybe, even more so during the COVID-19 pandemic, the consumer might have become less digitally naive and more digitally native, smarter and possibly, more evolved. To some degree, maybe, consumers have been spoiled by all the convenience, affordability and personalization with the growth of the middle class & VCs might be looking to tap into those markets. Maybe, these are the kind of mass-market solutions that VCs might find investable.
And Meesho, which was said to have started out as a social commerce platform, received one-fifth of the funding that Zepto did, but it’s still a pretty significant amount. So, maybe, social commerce might be in with investors, even as Meesho has become one of the biggest e-commerce platforms in India. The idea that a consumer might not just buy, but also, distribute might be interesting. Retail through social media to democratize e-commerce in India? That might be something that could empower smaller entrepreneurs.
If social networks are equivalent to trust networks in India, maybe Meesho could have looked into that as a social commerce platform. By integrating social networks into how things are sold, maybe there’s social proof in democratizing business for small entrepreneurs, which could have appealed to VCs. And if there are platforms, like PharmEasy and Healthkart, that are looking to solve India’s healthcare pain points, either looking to offer affordable medicines or diagnostics or supplements, along with online delivery, a VC might be interested to see how these startups play a role. Maybe, e-health is cooler now.
It might be the same with eyewear in the form of Lenskart: seemingly creating personalization and style in a space that seemed to be traditionally fragmented and offline. Another disruption might be Rapido, which might have created a differentiator with bike taxis in India’s mobility sector, as opposed to focusing on cars. This could be seen as a solution that might be not as costly, but still be as efficient, keeping aside the regulatory challenges.
Talking about e-commerce, PharmEasy and Lenskart seem to be creating niche e-commerce platforms. The specialization is the moat. PharmEasy seems to have been focusing on healthcare and diagnostics in a market that might have become more health-conscious, probably even more so during the COVID-19 pandemic and similarly, HealthKart is going the e-commerce route to sell supplements. Lenskart might have capitalized on Peyush Bansal’s status as a Shark and a potentially growing demand for affordable eyewear that might look stylish, especially since people have growing screen time due to increased digitalization in India. And both PharmEasy and Lenskart have gone offline. Plus, the fact that EvolutionX has helped play a role in shaping one of India’s top startups – PharmEasy – by value might vindicate the idea that debt financing can be a complementary funding avenue that would allow a startup to retain its equity, while still being able to scale.
With all these e-commerce startups in India, logistics might be pretty important, which would make sense as to why Ecom Express has received the kind of funding it did in India to be a panacea to last-mile delivery challenges. If there are infrastructure gaps that people say exist in India, could a VC see enabling logistics as truly scalable? Of course, with the golden age of AI taking place, that gets simplified to reduce delivery times and costs & curating rural connectivity might be a bit easier that day. That golden age of AI might be why Kore.ai or the list for enterprise software.
Physics Wallah and Eruditus are on the list, as well, even though EdTech platforms might have gotten a bad name since the BYJU’s debacle and the loosening of lockdown restrictions. The adulation students might have for Alakh Pandey might have helped with the investor confidence Physics Wallah might be getting, even if disposable incomes are constrained. It’s said that Physics Wallah produces roughly 9500 hours of educational content every week for students in roughly 98% of pin codes in India. Maybe, the lesson there is if Physics Wallah is going the hyper-localized route of producing content, that might be an edge. And maybe, the next wave of VC funding for EdTech startups might be those willing to educate people on how to one-up AI or conversely, how to become an AI expert.
Something, like Dream11, might show that fantasy gaming, as a business might be cool and investable in the 2020s, even if there might be some regulatory hurdles to tackle in case fantasy gaming ends up becoming gambling, It’s interesting: there might be two very different thought processes that are getting investor love. A player, like Zepto, might be focusing on hyper-personalization and multiple sub-verticals under one vertical. The core of the business might be retained, but more consumer needs might be covered to, essentially, become the daily routine of many a consumer and engage them across categories. The thought process might be that if a platform could be a one-stop-shop solution, the LTV might be higher than usual; an investor might like that.
Conversely, players, like PharmEasy or Lenskart, might stick to niches. Same with PhysicsWallah, which has a hyper-focused model and is looking to have deep sectoral expertise, instead of looking at horizontal growth. That might mean operational complexities might not be as much as a Zepto, so it could be a bit more capital-efficient. So, there might be a stronger focus on doubling down on one’s niches.
And how does this compare to what was going on in startup funding in 2023?
Maybe, in 2023, the funding rounds were a bit larger, compared to 2024 with Lenskart, which received $600 million, PharmEasy, which received $420 million and Udaan, which received $340 million. Sure, 2024 didn’t have more blockbuster funding rounds that way, but Zepto could be seen as the outlier there. But, while 2023 had funding for those startups that were in, kind of, mature sectors, 2024 might validate the notion that the funding’s a bit more diversified, especially with the inclusion of a Kore.ai or a Rapido. But, also, if funding is not as concentrated as it was in 2023, could this mean there’s a bit more investor caution?
So, could it be said that India’s startup ecosystem has become a bit more mature and efficient in 2024? How will you build a venture that’s purpose-driven, scalable and antifragile? What’s the next structural problem that India would solve to get on a VC’s radar? What are you expecting out of 2025?
