2024 transformative year for startups in India

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If there was one story in 2024 that stood out from the rest, it was the massive growth of the startup economy in India. Supported by a dynamic ecosystem, favorable government policies, increased investment, and a growing talent pool, India pushed forward as a hub for entrepreneurial ventures and a powerful engine for job creation.

In 2024, India emerged as the world’s third-largest startup ecosystem with more than 110 unicorns and is on track to becoming a developed nation by 2047, with startups playing a significant role in India’s economic growth.

The Narendra Modi-led Indian government plans to boost employment and upskill the workforce, startups, and small businesses in the current financial year that ends in March 2025.

As of October this year, Indian startups have reportedly raised close to $10 billion in funding, putting them on track to exceed the $10.5 billion raised in total funding throughout the previous year.

“2024 has been a pivotal year for tech startups, particularly those leveraging artificial intelligence (AI) across various sectors,” said Rohit Jain, Chief Strategy and Investment Officer of CoinDCX, India’s first digital currency unicorn.

In July, CoinDCX listed the BSV token for trading on its platform, allowing users to have more ways to buy, sell and trade BSV. With CoinDCX’s close to 15 million registered users, the listing marks a significant expansion into the Indian market for BSV and demonstrates its potential and possibility in the region.

“In the Web3 space, projects combining AI and blockchain technologies have captured investor attention like never before. The third quarter of 2024 alone witnessed a 5x quarter-on-quarter increase in crypto VC funding for AI-plus-Crypto startups, driven by the growing popularity of on-chain AI agents,” informed Jain.

“Apart from AI, we’re seeing substantial investor interest in innovations such as Decentralized Physical Infrastructure Networks (DePIN), Decentralized Science (DeSci), consumer-facing crypto Dapps, and gaming. These areas are proving to be catalysts for the next phase of Web3 adoption,” Jain told CoinGeek.

Major support for startups

To bolster entrepreneurial spirit and support innovation, India’s finance minister, Nirmala Sitharaman, abolished the ‘angel tax’ this year. The angel tax treats investments received by startups from external investors as ‘income from other sources’ and levies a 30% taxation on them. Often short of funds, startups tend to lose money as angel tax requires them to share a significant part of the investment towards paying taxes.

“The next five years will be years of unprecedented development and golden moments to realize the dream of a developed India by 2047,” Sitharaman said in February in her interim budget speech.

“For our tech-savvy youth, this will be a golden era. A corpus of rupees one lakh crore (one trillion rupees) will be established with 50-year interest free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates,” Sitharaman said.

In November, Google’s (NASDAQ: GOOGL) philanthropic arm, Google.org, announced a $1 million grant to the AI startup Karya, which creates job opportunities in rural areas in exchange for feedback to enhance the language capabilities of local AI models. Karya will also develop a multilingual AI chatbot to assist individuals with digital work.

The funding aims to create AI-driven economic opportunities for low-income communities globally, enabling people to access digital tasks related to artificial intelligence, such as data annotation and language-based AI training.

“In 2024, Web3 startups have thrived in sectors like DeFi (decentralized finance), gaming, and tokenized real-world assets. DeFi platforms such as Uniswap and Aave expanded their offerings, while gaming ecosystems like Axie Infinity 2.0 and The Sandbox enhanced user experiences through better tokenomics,” said Avinash Shekhar, co-founder and chief executive of Pi42, a digital currency derivatives platform.

“Infrastructure-focused projects like Celestia made strides in scalability, attracting developers, and tokenized asset platforms like RealT democratized ownership of real estate and art. Sustainability-focused initiatives like KlimaDAO also gained momentum by integrating blockchain with environmental goals, reflecting the growing alignment of Web3 with real-world impact,” Shekhar told CoinGeek.

Banking assistance for startups

In December, the Department for Promotion of Industry and Internal Trade (DPIIT) announced its partnership with HDFC Bank, India’s largest private sector bank by assets, to empower startups with world-class banking and financial services.

The partnership aims to strengthen the startup ecosystem by offering knowledge-sharing, mentorship, and capacity-building programs to foster innovation and growth. Startups are expected to benefit from customized banking and financial products that cater to their specific requirements, such as working capital, credit access, and cash flow management.

According to Sanjiv Singh, Joint Secretary of Startup India, India’s startup ecosystem is the bedrock of the nation’s innovation-driven economy, and empowering it further will always remain at the top of DPIIT’s agenda.

DPIIT also entered into partnership with Flipkart, an e-commerce company, to strengthen India’s startup ecosystem. Using its $100 million venture fund and the Flipkart Leap and Ventures program, Flipkart will invest in and mentor startups, offering resources for prototype development and global expansion. The partnership will provide startups with access to government resources, including research papers, datasets, and expedited patent applications.

‘1000 active startups’

“In 2024, India’s Web3 ecosystem flourished with over 1,000 active startups, particularly concentrated in Bengaluru (a city in south India). Notable success stories emerged from sectors like fintech, healthcare, and supply chain management, where startups such as Chaincode Consulting leveraged blockchain technology to create innovative solutions around NFT ticketing for Indian Railways,” Sharat Chandra, founder of EmpowerEdge Ventures and a startup enabler, told CoinGeek.

Dhiway, a blockchain startup, is working with Open Network for Digital Commerce (ONDC), an e-commerce organisation, to establish an interoperable distributed ledger network as a scoring repository. Dhiway has reportedly secured $1 million in pre-seed funding from Cornerstone Venture Partners Fund, Sunicon Ventures, and other existing shareholders to support market expansion and scale its product portfolio.

In November, Bharat Web3 Association, which facilitates collaboration between regulatory bodies and the Web3 ecosystem, released a report showcasing over 400 Web3 innovators shaping India’s digital landscape. The BWA report states that blockchain services solutions have emerged as the Web3 vertical, with the highest concentration of startups operating within it, with 79 startups engaged in developing blockchain-related solutions for various industries. This is followed by digital asset exchanges and blockchain infrastructure companies, which occupy second and third positions, respectively. Decentralized finance and gaming & entertainment complete the top five verticals within the Web3 sector.

“India’s Web3 ecosystem experienced remarkable growth in 2024, showcasing its potential as a global hub for blockchain innovation,” Raj Kapoor, founder of India Blockchain Alliance, told CoinGeek.

“Startups like Rario capitalized on India’s cricket fandom by offering NFTs of iconic sports moments, blending blockchain with cultural passions. Soulverse finished building a 360-degree decentralized identity infrastructure addressing the real challenge in the digital identity space,” Kapoor added.

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