TLDR:
- VCs invested over $8.3 billion in Indian companies in Q2 of 2024.
- New sectors like space tech, semiconductors, deep tech, and manufacturing are gaining interest.
Venture capital funds are starting to look at new sectors as the funding winter begins to lift in India. Despite the decline in funding over the past few years, VCs invested over $8.3 billion in Indian companies during the second quarter of 2024, marking an 18% increase in deal volumes compared to the previous quarter. Start-ups are showing more caution and thought with their approach to VCs, leading to a more rigorous due diligence process.
VCs are now turning their attention to sectors such as space tech, semiconductors, deep tech, manufacturing, and defense, alongside the enduring appeal of SaaS. Investments are also being made in areas like discretionary consumption, global trade enablement, energy transition, and AI powered solutions. Funds like Unicorn India Ventures and YourNest Venture Capital are actively seeking out deep-tech startups for investment.
As the market begins to ease, VCs are hopeful that a shift in US interest rates will prompt more capital deployment. Sectors like manufacturing are gaining traction, as businesses look to diversify away from China for geopolitical reasons. VCs are also focusing on compliance and ensuring dedicated resources to address concerns raised by investors.
