New Delhi, March 11 || India’s venture capital (VC) ecosystem demonstrated a strong recovery in 2024, with total funding reaching $13.7 billion, reflecting a 43 per cent increase compared to 2023, according to a report by global consultancy Bain & Company released on Tuesday.
Deal activity surged, with 1,270 transactions recorded, marking a 45 per cent rise in deal volumes. This resurgence reinforces India's position as the second-largest market for venture capital and growth funding in the Asia-Pacific region, especially in the context of 2024 funding in the region remaining largely in line with 2023, the report states.
Deal volumes increased across deal sizes and stages, while average deal size remained stable.
Small and medium-ticket deals (& $50 million), which made up around 95 per cent of the deals, increased by ~1.4x, whereas $50 million+ deals nearly doubled, rebounding to pre-pandemic levels as high-quality assets attracted deployments.
Megadeals ($100 million+) also rebounded with 1.6x increase in volumes as investors backed high-quality companies that successfully weathered the two-ye.ar funding winter, the report said.
Policy reforms such as eliminating the angel tax, reducing Long-Term Capital Gains (LTCG) tax rates, removing the National Company Law Tribunal (NCLT) process, and simplifying Foreign Venture Capital Investor (FVCI) registrations signalled positive momentum for the Indian start-up ecosystem and funding, according to the report.