Chennai: Start-ups raised this calendar year’s highest investment of $1.3 billion across 128 deals in May.
The surge in funding in May can be attributed to Google-Flipkart’s $350 million deal, a couple of $100 million plus rounds, and several growth stage investments, finds TheKredible.
The funding in May saw a nearly 29 per cent sequential jump over $1 billion in April. On a year-on-year basis, May 2024 also saw a 32 per cent rise in investments against $1.01 billion in May 2023. Since January, homegrown start-ups have raised over $5.1 billion which is likely to reach $12 billion by the year end. In 2023, the total funding in start-ups stood at $11.3 billion.
Bengaluru-based start-ups remained on the top with 52 deals, contributing around 60 per cent of the overall funding in May. Delhi-NCR and Mumbai followed with 33 and 14 deals, respectively.
E-commerce start-ups led the show with 25 deals followed by fintech with 20 deals. Start-ups saw eight mergers and acquisitions in May, a slight slump from nearly a dozen deals in April. While most of the deals were undisclosed, the acquisition of Device42 by Freshworks in a $230 million deal stayed on top of the list.
Unlike the past couple of months, there was a sharp fall in layoffs in May. Ed-tech company PrepLadder and fintech start-up Simpl fired 145 and 100 employees, respectively. In April, nearly 1,500 employees were laid off. However, the recent trend of AI implementation is likely to drive mass firings in the upcoming months.
“The strong revival in May might be attributed to a few large deals, but even these no doubt signal confidence in the market for many other investors, and serve as a good indicator of future direction in the market. Add to that possible delays from investors waiting for the elections to be over, and it is safe, despite headwinds, the Indian start-up ecosystem will look forward to a much better funds flow in the coming months,” said TheKredible.
