The year 2024 stands as a milestone in the history of Indian startups. Key policy reforms, significant IPO successes, and record-breaking funding inflows have defined the year. The abolition of the angel tax, a levy on investments in startups, played a critical role in shaping this transformation. Indian startups raised over $12 billion in funding, demonstrating resilience and growth.
Angel Tax Abolishment and Its Impact
The government abolished the angel tax in 2024, a move that significantly boosted investor confidence. This tax previously discouraged investments in startups, especially from foreign and domestic investors. Its removal created a more favorable environment for funding, catalyzing the growth of new-age businesses.
The abolition reduced compliance burdens and fostered innovation by channeling more resources into startups. As a result, Indian startups attracted significant capital, both from venture capitalists and angel investors.
Historic IPOs and Market Milestones
In 2024, 13 startups collectively raised ₹29,247.4 crore through the stock market. Of this, ₹14,672.9 crore came from fresh issues, while ₹14,574.5 crore was raised through Offer for Sale (OFS). This surge marked a new era for startups seeking public capital.
Key highlights of startup IPOs in 2024:
- Swiggy: The food delivery giant launched the largest IPO, raising ₹11,327.43 crore.
- Ola Electric: The EV startup secured ₹6,145.56 crore in its public offering.
- FirstCry: The baby products retailer raised ₹4,193.73 crore.
- Digit Insurance: The insurtech firm garnered ₹2,614.65 crore.
- TBO Tech: The travel technology company raised ₹1,550.81 crore.
The year also saw 10 mainboard IPOs and three SME IPOs. These offerings underscored the increasing confidence of startups in accessing public markets for capital.
Zomato Joins the Sensex
Zomato, the food delivery company, achieved a historic milestone by entering the Sensex, India’s index of top companies. The company replaced JSW Steel, a 142-year-old steel giant, in the Bombay Stock Exchange (BSE) benchmark. This achievement highlights the growing dominance of technology-driven businesses in India’s economy.
Zomato’s inclusion reflects the rise of consumer-tech startups and their ability to compete with traditional industries. The company’s strong performance and market influence have made it a symbol of India’s evolving corporate landscape.
Unicorn Milestones and Ola Krutrim
India welcomed its first AI unicorn, Ola Krutrim, in 2024. This achievement marked a significant milestone for artificial intelligence startups in the country. Ola Krutrim became the third unicorn from the Ola Group, led by Bhavish Aggarwal. Earlier, Ola Electric and Ola Cabs had achieved unicorn status.
Ola Krutrim’s rise reflects the increasing focus on AI-driven solutions. The startup leverages cutting-edge technology to address challenges across industries, further solidifying India’s reputation as a hub for tech innovation.
Funding Achievements and Historical Trends
Indian startups crossed the $150 billion funding mark in 2024, achieving a cumulative total of $151 billion between 2014 and 2024. This milestone reflects the steady growth of the ecosystem over the past decade.
Annual funding trends during this period:
- 2021: Startups raised $42 billion, the highest in a single year.
- 2022: Funding declined to $25 billion.
- 2023: Startups raised $10 billion, affected by global market corrections.
- 2024: Funding rebounded to $12 billion, supported by policy reforms and IPO successes.
The growth of India’s startup ecosystem has consistently attracted global investors, ensuring its resilience in fluctuating market conditions.
IPO Landscape Evolution
Indian startups have increasingly embraced IPOs as a means to raise capital. Over the past four years, the number of IPOs has steadily increased:
- 2021: Ten startups went public.
- 2022: Six startups launched IPOs.
- 2023: Another six startups tapped the public markets.
- 2024: A record-breaking 13 startups launched IPOs, highlighting growing confidence in public listings.
The IPO trend signals a maturing ecosystem where startups transition from private funding to broader market participation.
Rising Unicorn Count
India’s startup ecosystem added significant value to its roster of unicorns in 2024. The total number of unicorns reached 118, underscoring the rapid pace of innovation and investment in the country.
Key contributors to this growth include technology-driven solutions, consumer-centric platforms, and advancements in fintech, e-commerce, and AI. Startups like Ola Krutrim showcase the diversity of sectors contributing to this surge.
Policy Reforms Driving Growth
The removal of the angel tax was a pivotal policy reform, but other government initiatives also supported startups in 2024. Simplified regulatory frameworks and enhanced ease of doing business allowed startups to focus on innovation. Incentives for AI and EV (electric vehicle) startups created a fertile ground for emerging technologies.
The government also streamlined IPO processes, encouraging more startups to go public. This move reduced barriers for new-age companies aiming to access capital markets.
Bengaluru: The Startup Capital
Bengaluru remained the epicenter of startup activity in 2024. The city witnessed a surge in unicorns, funding rounds, and IPOs. Its infrastructure, talent pool, and supportive ecosystem continue to attract entrepreneurs and investors alike.
The startup hub also led in the number of IPOs, with several high-profile companies preparing to list in 2025. Bengaluru’s dominance reflects its role as the driving force behind India’s tech-driven economic growth.
The Role of Domestic and Global Investors
Domestic investors, including family offices and venture capital firms, played a more significant role in 2024. Their participation reduced dependence on global funds and strengthened the local ecosystem. At the same time, global investors continued to show strong interest, with firms like Tiger Global and Sequoia Capital leading major funding rounds.
This dual participation ensured a steady flow of capital into the ecosystem, supporting startups across various stages of growth.
Emerging Sectors
Several sectors gained prominence in 2024, reflecting changing consumer behavior and technological advancements:
- Artificial Intelligence: Startups like Ola Krutrim drove innovation, making AI a top investment priority.
- Electric Vehicles: Ola Electric’s IPO success highlighted the growing demand for EV solutions.
- Fintech: Platforms offering digital insurance, payments, and lending continued to attract funding.
- E-commerce: Companies like FirstCry expanded their reach, meeting rising consumer demand for online shopping.
These sectors represent the future of India’s startup ecosystem, offering immense potential for growth and investment.
Challenges and Opportunities
While 2024 was a year of achievements, challenges persisted. Startups faced increased competition, rising operational costs, and evolving regulatory requirements. Addressing these challenges required agility, innovation, and strategic planning.
Opportunities also emerged from these challenges. Policy reforms, increased funding, and a maturing ecosystem provided startups with the tools to overcome hurdles. By leveraging these opportunities, startups positioned themselves for sustained growth.
Outlook for 2025
The achievements of 2024 set the stage for a promising 2025. The IPO pipeline remains robust, with startups across various sectors planning public listings. Continued government support, coupled with investor confidence, ensures a positive outlook for the ecosystem.
Key trends to watch in 2025 include:
- Increased IPO Activity: More startups are likely to go public, leveraging favorable market conditions.
- Focus on AI and EV: These sectors will continue to attract significant investment.
- Global Expansion: Indian startups will increasingly target international markets for growth.
- Innovation in Fintech: Startups will develop new solutions to address financial inclusion and digital transformation.
Conclusion
The year 2024 marked a turning point for Indian startups, driven by policy reforms, IPO successes, and record funding. The abolition of the angel tax provided much-needed relief, enabling startups to attract more investments. Landmark IPOs from companies like Swiggy, Ola Electric, and Zomato showcased the ecosystem’s maturity and potential.
As the startup landscape evolves, the achievements of 2024 will inspire future growth. Indian startups are poised to play a pivotal role in the global economy, transforming industries and creating value for stakeholders. With a strong foundation and promising outlook, the journey ahead looks brighter than ever.