Is Indian Startup Funding Overvalued? 3 New Unicorns & Q3 2024 Funding

In the dynamic landscape of Indian startups, Q3 2024 has brought significant developments. However, the data on startup funding has sparked conflicting reports, with INC42 and Kredible Data offering differing figures. While INC42 claims that Indian startups raised $3.4 billion during this period, Kredible Data, which has also been widely cited in the media, reported a higher total of $4.08 billion across 352 deals.

Startup Funding News: Key Points from Both Reports

• Mega Deals: Both reports highlight a surge in mega deals, with Zepto, PhysicsWallah, Rapido, and others leading the way.
• Unicorn Creations: The emergence of Moneyview, Rapido, and Ather Energy as unicorns is confirmed by both sources.
• Funding Stage Trends: Both reports indicate growth in seed and growth-stage funding, while late-stage funding saw a decline in H1 2024.

Indian Startup Funding in Q3 2024

• • According to INC42, the total funding for Q3 2024 amounted to $3.4 billion, marking a 100% year-on-year increase. On the other hand, Kredible Data reported $4.08 billion raised, reflecting a slight decrease from $4.27 billion in Q2.

The disparity raises questions about methodologies used to track funding. INC42's focus on confirmed funding rounds and potentially excluding unannounced deals may explain the difference. Meanwhile, Kredible Data appears to account for a broader range of deals, possibly including debt funding and secondary transactions.

Surge in Mega Deals and Unicorns

• Both reports highlight the growing number of mega deals. INC42 noted 10 deals over $100 million, while Kredible Data emphasized Zepto’s $340 million and DMI Finance’s $334 million deals as key contributors.
• Three startups—Moneyview, Rapido, and Ather Energy—entered the unicorn club in Q3 2024, aligning in both reports. This matches the unicorn entries of H1 2024, indicating sustained investor confidence in select sectors.

Late-Stage Startup Funding Growth

• INC42 highlighted a 115% growth in late-stage funding, reaching $2.1 billion across 40 deals, a 135% increase in deal count. Kredible Data provided more detailed sector-specific breakdowns, with fintech startups alone raising $1.15 billion, underlining the dominance of late-stage and sector-driven funding.

Sectoral and Regional Funding Trends

• Kredible Data showed fintech continuing to lead, followed by strong performances in e-commerce, healthtech, and SaaS. On the regional front, Bengaluru once again dominated, raising $1.38 billion, with Delhi-NCR close behind at $1.3 billion. INC42 didn’t specify the regional breakdown, but both sources agree that Bengaluru remains a startup powerhouse.

M&A and IPO Activity

• Mergers and acquisitions saw significant activity in Q3, with 54 deals, almost doubling Q2’s numbers, according to Kredible Data. The biggest acquisition was OYO’s $525 million purchase of G6 Hospitality. IPO preparations also ramped up, with companies like Ola Electric and Ather Energy eyeing public markets, underscoring the maturation of the Indian startup ecosystem.

Layoffs and Shutdowns

• Both reports noted a slowdown in layoffs, with 1,200 employees let go in Q3 compared to 2,200 in Q2, reflecting more stability. However, eight startups, including Koo and Wynk Music, shut down, signaling challenges remain for early-stage and underfunded ventures.

Funding Outlook for Q4 2024 and Beyond

The conflicting data from INC42 and Kredible Data raises questions about how Indian startup funding is tracked, but the broader trends remain positive. A significant surge in mega deals, late-stage funding, and unicorn births suggests growing confidence in India’s maturing startup ecosystem, despite macroeconomic challenges and sector-specific struggles.

The continued dominance of fintech, coupled with emerging trends in renewable energy and wealthtech, points to a diversified investment strategy among venture capitalists. As IPOs and M&A activity accelerate, Q4 2024 could potentially see record-breaking outcomes if the current momentum sustains.

For now, the Indian startup ecosystem stands resilient, bolstered by a surge in funding across stages and sectors. However, clarity in reporting will be crucial to accurately assessing its future trajectory.

Disclaimer: The content above is based on secondary reports published in the media. TICE neither endorses nor disputes the accuracy of any data mentioned. For any discrepancies or corrections, please reach out to us at editorial@tice.news, and we will be happy to make the necessary changes to our report.