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Late-stage funding drops to lowest level since 2017 as negotiations drag out

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Nikhil Patwardhan

37 reads
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Nikhil Patwardhan

37 reads

The first few months of this year saw numerous stories of funding flowing back into India’s startup ecosystem. But how many of these rounds have materialised? Late-stage funding in the first five months of the year is at its lowest level in 7 years.

May 29, 2024

8 MINS READ

Key Takeaways

  • Late-stage funding (Series C onwards) dropped to a seven-year low in the first five months of 2024 as deal negotiations continue to drag out
  • The average deal size of late-stage investments has also fallen to $47 million so far this year compared to over $57 million in the same period of 2023
  • Investors are now shifting focus towards metrics such as EBITDA multiples from revenue or GMV multiples
  • Big ticket investors continue to shy away from India’s startup ecosystem after being extremely bullish during the pandemic years

Towards the end of the last financial year, excitement returned to the startup deal street. Reports surfaced about new investments, funding rounds were getting closed, and marquee global investors were making comebacks, breathing fresh life into India’s startup ecosystem after nearly two years of stagnation.

Not only were smaller deals happening, but mid- and growth-stage deals exceeding $20 million were also being announced. More importantly, news of large startups seeking to raise $100 million rounds appeared almost every other day.

The CapTable reported at least 10 major technology companies—including Innovaccer, HealthKart, Lenskart, and PocketFM—were in the market to raise funding rounds worth upwards of $100 million. To be sure, many of these companies had been quietly seeking funding for well over a year, even if not actively. 

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