Large deals power paradigm shift in India's venture capital terrain

India’s venture capital (VC) landscape saw a strategic shift during the first half (H1) of the calendar year (CY) 2024, with a notable increase in larger-sized investments.

This was evident from a 45.3 per cent rise in disclosed funding value year-on-year, despite a 2.1 per cent drop in deal volume, according to GlobalData, a data analytics and consulting company.

This trend indicates growing investor confidence in high-potential startups.

Big deals like Zepto ($665 million) and Meesho ($300 million) also signal a robust future.

According to the analysis, India saw 572 VC deals worth $5.6 billion announced during H1CY24, compared to 584 VC deals totalling $3.8 billion in H1CY23.

The growing investor confidence in India is also reflected in its share of global VC funding. In H1CY24, India accounted for 4.4 per cent of global VC funding value, up from 3.1 per cent in the same period last year.

The volume share of deals in India rose to 7 per cent in H1CY24 from 5.1 per cent last year.

Aurojyoti Bose, lead analyst at GlobalData, comments: “The massive jump in VC funding value despite a decline in deal volume suggests an improving appetite for big investments while adopting a cautious approach.

"This is further evidenced by the increase in the average size of VC deals from $6.5 million in H1CY23 to $9.7 million in H1CY24.”

Additionally, the total number of high-value deals above $100 million increased from seven to eight.

What makes these numbers even more compelling is the challenging period VC funding went through in India during H1CY23.

From January through July 2023, the country saw a marked downturn in funding activity, with VC deal volumes falling by 42.9 per cent and disclosed funding value plummeting by 72.5 per cent compared to the same period in CY22.