2024 emerged as the year of startup IPOs, with 12 companies going public and collectively raising billions. Leading the charge was Swiggy’s landmark $1.35 billion IPO, cementing the ecosystem’s global stature.
Venture capitalists enjoyed a windfall, earning over $4 billion in IPO returns—double the 2023 figures. Major players like SoftBank, Peak XV, Accel, and Elevation reaped the rewards of patient investments, turning long-term bets into substantial gains.
Despite global economic challenges, India’s markets showcased resilience, supported by robust economic growth, regulatory reforms, and sustained investor confidence. With at least 25 IPOs already anticipated for 2025, the momentum shows no signs of slowing down.
Big-ticket funding dominated headlines in 2024, with startups raising over $10 billion. Notably, family offices emerged as significant contributors, injecting over $1 billion into the ecosystem. While early-stage funding remained vibrant, growth-stage investments reflected a cautious yet quality-focused approach amidst global uncertainties and shifting interest rates.
Challenges persisted, though. Layoffs decreased significantly compared to 2023, yet nearly 9,000 employees faced job cuts. Corporate governance issues continued to trouble notable startups like Byju’s, while others, including Koo and Reshamandi, shuttered operations.
CNBC-TV18 spoke to Dr Apoorva Ranjan Sharma, Co-Founder & MD of Venture Catalysts; Mrigank Gut-Gutia, Partner at Redseer; Vaibhav Anant, Founder of Bambrew; and Vivek Pandey, Co-Founder of Ecozen who reflected on the milestones of 2024 and shared their outlook for 2025.
Below are the excerpts of the discussion.
Q: Tell us what were the key milestones of the year gone by and what will continue to drive momentum and deal activity in 2025?
Sharma: The key milestone of 2024 is AI transformation which is happening. The o1 which is the next level of ChatGPT is transforming the things globally. Now the things have moved from LLM to the o1 level where they are able to think and they can also respond and listen to the queries. So basically, next level AI transformation is happening globally.
In space tech Tesla has brought back the rocket engine that is also a big milestone. So, the impact of that is also happening in India. You can see a lot of AI transformation happening.
Q: 2024 also saw resurgence of major funding rounds, with VC firms injecting over $10 billion into the ecosystem. What was expected to be a chilly winter for venture capital saw funding spring, with Indian startups seeing large ticket deals in winter 2024-2025, setting an optimistic tone. What’s fuelling this winter funding spring?
Sharma: Two things which are fuelling the winters, which has just gone, I would say. One, the 12 IPOs, which have just happened in this year. In the last three years, Indian stock market, the success of startup is established. And the return also. Remember, there was Paytm IPO, the big chunk of that has gone to the global investors as an exit. From there, it started. So global investors have realised that Indian stock market is responding to startups very, very well. And that is why you can see the Zomato and Swiggy story also now this year. So that is giving the confidence to global investors, that if you invest in India, the exit mechanism is already in place.
Number two is the bottom line focus of the large companies, which was not the case three years back. The funding winter has taught us a lot. Almost all the large companies, they are focusing a lot on bottom line, because they’re targeting IPO in Indian stock market. That is why the strength of Indian startups is also reflected to the global investors. And that is why you see these startups becoming more attractive to the global investors.
Q: Quick commerce has been the buzzword for this year. Could you start by explaining why this segment has taken off the way it has and where the current GMV average spends and the number of users stands?
Gut-Gutia: Quick commerce has had a fantabulous year. Looking at the data sets of the total size of the sector, we see that every month the sector is breaking all the records in terms of growth. So most of the months this year, the quick commerce sector in India, when we look at the GMV levels, it is growing at more than 80% on a year on year (YoY) basis. And if you talk about the actual GMVs that we expect, I think by the end of FY25 or let’s say by the whole FY25 period, I think we will see the sector exceeding the GMV of close to $6 billion. So, for a sector that was just about less than $1 billion, maybe four or five years ago to reach the $6 billion scale by FY25, I think it’s a fantastic achievement.
I think one of the biggest factors that is driving the growth of the sector is the monthly transacting users. So just about a few months ago, the sector had about 9 million monthly transacting users. But because of this phenomenal growth in adoption and experience, we expect that the monthly transacting users will be more than 15 million. It’s already there in these last few, last couple of months, and the average for the whole year might also be sitting around the 15-17 million mark.
Essentially what is happening is that user is just spending across the categories, not just grocery, but across electronics and home goods, some part of fashion, beauty, and so on. So, it’s really spending across the segments and the huge convenience that quick commerce has afforded to our customers that is really driving the phenomenal growth in the sector.
Watch accompanying video for entire discussion.
