AI to take driver's seat as tech advances
Based on findings from the Nasscom Industry Pulse Survey, 88% of founders reported revenue growth in 2024, exceeding the 67% projection from the previous year.
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Artificial intelligence (AI) will be the central driver of technological advancements as models mature and deeptech innovations scale up, supported by favorable policies, corporate interest, and rebounding investor interest, according to a joint report by Nasscom and Zinnov.
The report, titled Road to Recovery – Indian Tech Start-up Landscape 2024, said one of the key developments last year was the surge in deeptech startups.
Based on findings from the Nasscom Industry Pulse Survey, 88% of founders reported revenue growth in 2024, exceeding the 67% projection from the previous year. This was driven by evolving business models, go-to-market innovation, strategic partnerships, and the heightened focus on deeptech investments.
Investments in the deeptech segment increased by 78% last year, reaching $1.6 billion, with deal volumes growing by 24%.
Across all funding stages, median deal sizes for deeptech startups surpassed those of traditional tech ventures. Late-stage deeptech companies saw the most significant hike, with a 2.7-fold increase in median deal size over 2023.
Within the deeptech category, seed and early-stage startups captured over 35% of total deeptech funding, which is a nine-percentage-point increase from the previous year. About 87% of funding went to startups using artificial intelligence (AI).
“The growth across mature and emerging sectors, specifically in DeepTech and AI, outlines the Indian tech startup ecosystem’s growing maturity, evolving from being just a hub of opportunities to becoming a strategic force driving India’s digital economy. DeepTech startups play an increasingly crucial role in shaping India’s innovation landscape. Our focus now must be on strengthening the foundational pillars of this growth, from enhancing capital access to building robust innovation infrastructure, ensuring our startups can compete globally while solving uniquely Indian challenges,” said Rajesh Nambiar, president of Nasscom.
Tech startup on significant recovery
Meanwhile, the report also noted that India’s tech startup landscape saw significant recovery last year, driven by increased funding, more new ventures, and a shift in investment focus toward sustainability and advanced technologies.
This increase was accompanied by a 27% year-on-year growth in the number of deals, indicating renewed investor engagement.
The startup landscape also saw a more than twofold rise in the number of newly founded startups, bringing the total count to about 35,000 tech startups in India, the report said.
Despite a cautious global investment environment, the Indian startup landscape is undergoing a recalibration of venture capital strategies, the report said.
Investors are now giving importance sustainable growth and strong business fundamentals over aggressive funding rounds. This was seen across in funding in all stages: seed-stage startups recorded the highest growth at 29%, followed by early-stage at 25% and late-stage at 21%.
About 67% of the total funding in 2024 was directed toward “matured” sectors, mainly retail tech and health tech, the report noted. Both these sectors exceeded their five-year performance averages.
Moreover, sectors such as aviation, maritime and defense, and environment tech also showed a growing deal momentum—indicating growing interest in emerging technology areas.
Last year, India also added six new unicorns—the second-highest globally. This brought the total valuation of Indian unicorns beyond $220 billion. These companies together accounted for 33% of all tech startup funding.
Indian tech initial public offers tripled compared to the previous year, making 2024 a record year for public market fundraising.
Artificial intelligence (AI) will be the central driver of technological advancements as models mature and deeptech innovations scale up, supported by favorable policies, corporate interest, and rebounding investor interest, the report said.
