binarypublishTLDR:
- Less than half of Indian startup founders expect improved funding in 2024, according to a survey by tech association Nasscom.
- Startups focused on deep tech solutions are expected to see promising growth and improved funding this year.
Only 46% of Indian startup founders are hopeful about the funding environment for 2024, as per a survey report published by tech association Nasscom in collaboration with management consulting firm Zinnov. The previous year saw the worst startup funding in five years, with deal volumes dropping 48% compared to 2022.
Startups focused on deep tech solutions are expected to see promising growth and improved funding this year. Despite the challenges in 2023, 60% of startup founders are expecting a growth in revenue in 2024. Investors have urged new-age firms to focus on sustainable profitability and optimizing expenditure over growth and valuation, especially for B2B tech startups.
The report highlights that a significant portion of unfunded tech start-up founders anticipate higher revenues in 2024 compared to their funded counterparts. Out of the 750 startups that received funding in 2023, 72% were seed-stage deals, while late-stage funding saw a significant drop. This reflects changing investor strategies towards allocating capital selectively, favoring profitable ideas over high valuation companies. The Indian tech startup ecosystem has attracted over $70 billion in cumulative funding between 2019 and 2023, with growth now anchored in improving business metrics and revenue streams.
Looking ahead, deep tech solutions are expected to continue receiving funding, with companies across verticals looking to automate operations and explore emerging areas such as SpaceTech and ClimateTech. Artificial intelligence is a major focus for startups, with nearly 70% of startups investing in it to enhance product capabilities and reduce operational costs.
However, the report argues that several changes need to be made to accelerate the ecosystem further. This includes identifying key sectors for DeepTech investment, fostering an integrated approach for innovation, market connections, and support in areas such as testing, patent filing, certifications, and training. Bolstering domestic venture fund flow through innovation-focused programs and adopting a pro-innovation, risk-based approach to AI regulation are also recommended to aid the growth of the deep tech sector.
