Growth-stage funding consolidates as investors seek quality

AFTER YEARS OF muted activity in India’s growth-stage funding market, Series Band C rounds are showing strong signs of capital consolidation this year, even as the overall funding continues to dip.

- AYANTI BERA

Data from Tracxn show that while deal volumes are shrinking across stages, cheque sizes are rising primarily in growth-stage rounds. This suggests that once the early bets are made, investors are backing fewer companies but with greater conviction.

In Series B rounds, the number of deals dropped sharply to 108 so far this year from 124 in 2023, continuing the downturn that began after 2021's funding boom. Yet, total capital invested surged from $1.3 billion two years ago to $1.8 billion this year. Similarly, while there were only 50 Series C rounds this year, compared with 72 in 2023, the total capital invested remained the same, around $1.1 billion.