- Startups must focus on strong unit economics and profitability for growth in 2024.
- Venture capitalists are shifting from aggressive to sustainable growth.
- Early-stage funding and domestic investments are on the rise.
After the “funding winter” of 2023, the startup ecosystem is poised for a rebound in 2024, provided startups emphasize strong unit economics and prioritize profitability. This sentiment was echoed at the India Global Innovation Connect (IGIC) 2024, where industry leaders discussed the future of startup investments.
Madhu Gupta Khandelwal from EthAum Venture Partners, Mikihide Katsumata of Innovation Network Corporation of Japan, Abhay Maheshwari of Jupiter Capital, and Nruthya Madappa from 3one4 Capital highlighted the renewed focus on business fundamentals. Venture capitalists are now favoring sustainable growth over aggressive expansion, with an emphasis on value rather than high valuations.
The panel also noted an increasing trend towards seed and pre-seed funding in the Indian startup scene. The uncertainty from the COVID-19 pandemic has made investors more risk-averse, favoring smaller, less risky funding rounds. This trend is expected to continue into 2024, contrasting with the previous emphasis on Series A and Series B funding.
Furthermore, there has been a rise in domestic funding, with more local investors supporting Indian startups. This growing domestic investor base is contributing to the ecosystem’s growth and resilience, indicating a positive outlook for 2024 driven by profitability, strong unit economics, and sustainable growth.
