Key Points:
- Venture capitalists are expected to return in 2024, betting on early-to-growth stage startups.
- Funding rounds of Series A and beyond are likely to gain traction.
Venture capitalists who were cautious in 2023 due to high interest rates and inflated valuations are likely to return in 2024. Funding rounds of Series A and beyond are expected to gain traction, as valuations have become more reasonable. Investments by private equity and venture capital funds totaled $27.9 billion in 2023, a 40% decrease from the previous year. However, as mature startups prepare to go public in 2024, early backers may make way for long-term investors. Companies like Oyo, Ola Electric, FirstCry, Lenskart, Ixigo, OfBusiness, Urban Company, and Swiggy are among the startups aiming to go public this year.
In 2021, startups raised capital during the COVID-19 pandemic but had to trim costs and restructure their business models to become sustainable. As the focus shifted from fundraising to profitability, growth-stage firms became more attractive to investors. India has a higher weightage from global investors, which raises optimism for larger inflows. Funding activity in 2023 marked a period of consolidation, with investors shifting their approach to focus on business fundamentals and profitability. However, 2024 is expected to be a precursor to an exciting growth phase, with several tech leaders expected to go public.
Key Takeaways:
- Venture capitalists are likely to return in 2024, betting on early-to-growth stage startups.
- Funding rounds of Series A and beyond are expected to gain traction.
- Valuations have become more reasonable, creating opportunities for investment.
- Mature startups preparing to go public may attract long-term investors.
- Focus on profitability and sustainability has made growth-stage firms more investible.
- India’s higher weightage from global investors raises optimism for larger inflows.
- 2024 is expected to be a precursor to a growth phase, with several tech leaders going public.
