Bengaluru, also called India’s Silicon Valley, continued its perch on top as the country’s most favoured destination by private equity (PE) and venture capital (VC) investments in Q1 2024. However, fundraising by companies based in the city fell sequentially in January-March.
Capital flow into Bengaluru fell to $1.16 billion in Q1 from $1.47 billion in the previous quarter, according to DealStreetAsia DATA VANTAGE‘s recent report India Deal Review: Q1 2024.
Eighty-eight startups in the city sealed funding deals in the quarter, the top ones being Pocket FM, Shadowfax, Capillary Technologies, Perfios, AiDash, Krutrim, and ShareChat.
Bengaluru was followed by Mumbai ($519.3 million) and Gurugram ($194.4 million), while Delhi and Hyderabad took the next two spots in fundraising value.
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The top three cities accounted for over 70% of the total investments in India of $2.6 billion in Q1 2024. The total funding into the three top cities in Q1 dropped 18% from the previous quarter. They also accounted for 58% of the total deal volume of 290 in the country in the period.
Smaller Indian cities like Noida, Pune, Ahmedabad, Patna, and Kanpur are making progress in grabbing investors’ interest.
Noida rose to the sixth spot in the first quarter this year from the tenth spot in the previous quarter. Pune featured among the top ten most funded cities in the country in both Q1 2024 and Q3 2023.
Top three deals in India in Q1
Mumbai-based Avanse Financial Services was the most funded startup in Q1 2024. The Mumbai-based educational loan provider raised Rs 1,000 crore ($120.6 million) in equity led by Abu Dhabi sovereign wealth fund Mubadala Investment Company.
Pocket FM that raised $103 million and logistics company Shadowfax that raised $100 million were next in the list of most funded startups in the quarter.
The top three deals’ share in the total investments in Q1 2024 stood at 31%, down from 44% in the previous quarter.
Six companies from Bengaluru were featured in the top ten deals. Two companies from Mumbai, and one each from Hyderabad and Kolkata also featured in the top deals of the quarter.
Fintech lending jumps to the top
Fintech lending bagged the highest funding in Q1 2024 as investments into the vertical jumped four times from the previous quarter. Fintech lending was only the seventh spot most funded vertical in Q4 2023. Deal volume also rose 60% to 16. Avanse Financial Services’ $120 million round boosted the funding.
E-commerce and SaaS were the next most funded verticals.
The top three verticals jointly accounted for nearly half of the investments in the country in the first quarter of 2024.
In terms of deal volume, e-commerce retained its top rank and was followed by fintech and healthtech.
