Seed funding hits a 4-year low

DESPITE A MODEST recovery in startup funding this year, seed-stage investments remain in a slump, hitting their lowest since 2020.

- AYANTI BERA

The number of seed funding rounds plummeted 40% to 925 in 2024, down from 1,545 last year, according to Tracxn data. The total raised also shrank 22%, barely crossing $971 million. The lowest before this was in 2019, when funding stood at $814 million. The dip reflects a growing investor hesitancy to back untested business models. First-time funding rounds fell 40% to 393 startups this year, compared to 665 in 2023.

While funding rounds have declined across the board, the drop has been steeper at the seed stage. Early-stage and late-stage rounds saw smaller declines of about 8%. However, late-stage funding bucked the trend, climbing 22% to $7.13 billion. Early-stage funding also edged up 2% to $3.16 billion. Overall, startup funding in 2024 rose 6% year-on-year to $11.3 billion.