The first month of the year saw Indian startups facing challenges amidst a funding winter, which resulted in a decline in funding inflow. Despite mass layoffs, shutdowns, and top-level exits, one standout was Bhavish Aggarwal-led AI startup Krutrim, which became a unicorn in record time.
In January, Indian startups raised $732.7 million across 107 deals, as compiled by TheKredible. This included 21 growth-stage deals amounting to $418.3 million, 70 early-stage deals worth $314.4 million, and 20 undisclosed rounds.
Compared to December 2023, January witnessed a sharp drop from $1.7 billion. Additionally, it marked the lowest funding amount for January in the past three years. Notably, no startup reached the three-digit million dollars funding mark in January.
The top funded startup in January was fintech company Vivifi, securing $75 million. Other top-funded companies included AiDash, WoW! Momo, Impact Analytics, and BluSmart.
Debt funding was raised by three growth-stage companies, including OneCard, Infra.Market, and Yulu.
Regarding early-stage deals, Bhavish Aggarwal-led Krutrim SI Designs announced $50 million funding, becoming the fastest unicorn in the Indian startup ecosystem. Other top-five early-stage deals included International Battery Finance, StockGro, FinAGG, and Ecofy. StockGro raised the highest debt funding for the month.
In terms of funding rounds, seed funding deals dominated with 35 deals, followed by Series A (19), pre-Series A (15), and pre-seed (12) deals. In the growth-stage, there were eight deals each for Series C and Series B, along with five debt funding rounds.
Bengaluru remained the city with the highest number of deals, securing around $317.13 million or approximately 43% of the total funding raised in January. Delhi-NCR-based startups followed with 24 deals amounting to $107.91 million. Mumbai recorded 17 deals, with Hyderabad, Chennai, Pune, and Thane also seeing notable activity.
Fintech startups led the way in terms of the number of deals by segment, with 20 deals in January. They were followed by e-commerce (18), healthtech (11), and SaaS (7). Agritech, EV, edtech, AI, foodtech, and manufacturing startups also made it into the top 10.
The month of January also witnessed nine mergers and acquisitions. Some notable deals included Infosys acquiring automotive semiconductor design firm InSemi, DMI Group acquiring BNPL startup ZestMoney, Veranda acquiring edtech firm Tapasya Educational Institutions, Nodwin Gaming acquiring event hosting company Comic Con India, and MakeMyTrip acquiring cab services platform Savaari Car Rentals.
In terms of layoffs, more than 600 employees were affected across three startups. Swiggy topped the list with 350 layoffs, followed by Cult.fit and InMobi. While Flipkart was also reported to have laid off more than 1,000 employees, official confirmation is pending.
Several top-level employees also exited various Indian startups. Udaan witnessed two exits, including CFO Aditya Pande and FMCG business head Vinay Shrivastava. Indus Appstore and KnowledgeHut experienced CEO exits, while DealShare and Fashinza faced co-founder departures.
Furthermore, Rario and ByteDance’s Resso announced the shutdown of their operations. Rario plans to launch a new product by March this year.
The year-long trend of booming stock markets and declining startup funding continues. However, investors have significant funds available and are seeking a clear direction for investment. While edtech and gaming firms have experienced a steep decline, newer categories such as Clean Energy, Fintech, and AI are expected to drive growth in the future.
Please note that the information provided is based on data compiled by TheKredible and various sources, and certain details such as official confirmations are still pending.
