Bengaluru’s tech startup scene, while experiencing a funding decrease in 2024, continues to be the core of India’s technological innovation.
According to Tracxn data, tech startups in Karnataka secured $3.7 billion in funding during 2024. This represents a 24% decrease compared to the $4.9 billion in 2023 and is significantly lower than the $11.7 billion raised in 2022. However, early-stage investments demonstrated resilience, rising by 10% year-over-year to $1.1 billion. This indicates continued investor confidence in the state’s future tech ventures.
Both seed-stage and late-stage funding experienced declines, dropping 18% and 32% respectively. Notably, Bengaluru accounted for nearly all of Karnataka’s funding activity, with other cities such as Mysuru and Tiptur contributing far less.
The retail, enterprise applications, and transport and logistics sectors proved most attractive to investors. Flipkart and Meesho led funding rounds, securing $350 million and $275 million, respectively. Furthermore, Rapido’s $200 million funding round demonstrated continued optimism in the e-commerce and mobility sectors.
Bengaluru also saw the emergence of six new unicorns in 2024: Krutrim, Perfios, Porter, Rapido, Ather Energy, and Money View. This highlights Bengaluru’s position as a breeding ground for companies valued at over a billion dollars. In fact, all of India’s new unicorns this year originated in Bengaluru.
The year also saw exits, with eight Karnataka-based startups going public. These included well-known names such as Swiggy, Ola Electric, and Digit Insurance. Additionally, 49 acquisitions were reported, with iBUS and Loyal Hospitality among the most high-profile buyouts.
Both international and domestic investors remained active. Accel, Elevation Capital, and Peak XV Partners led early-stage funding rounds, while SoftBank Vision Fund and other major international investors continued to support late-stage deals.
Industry experts suggest that this funding correction could prove beneficial in the long term, promoting greater financial discipline and a focus on profitability within startups. Supported by government initiatives such as the Startup India Seed Fund Scheme and ongoing tax incentives, Karnataka’s tech ecosystem is expected to remain a major force in India’s startup landscape, despite current economic headwinds.
