India’s direct-to-consumer (D2C) startup ecosystem witnessed a sharp pullback in funding in 2024, signalling a shift in investor sentiment amid global uncertainties and domestic market saturation. According to a report by private market intelligence firm Tracxn, total investments in the sector stood at $757 million, marking an 18% decline from the $930 million raised in 2023. The drop is even steeper when compared to the peak of $1.6 billion in 2022, underscoring the correction the space is undergoing.
While total funding is on the decline, investor interest hasn’t disappeared — it has merely recalibrated. Early-stage D2C startups saw a surge in backing, with funding in this segment rising to $355 million, up 25% year-on-year. Seed-stage companies also experienced renewed investor focus, attracting $141 million, an 18% increase from 2023 levels.
The slowdown in overall capital inflow reflects broader caution in the startup ecosystem, driven by economic headwinds, escalating customer acquisition costs, thinning margins, and questions around long-term profitability. Late-stage startups, once the darlings of D2C funding, bore the brunt of the downturn, raising just $261 million in 2024, a dramatic 50% drop from the previous year.
Despite the tightening purse strings, certain verticals remained bright spots. Organic beauty, online jewellery, and personal care brands led the charge in terms of investor appeal. Among the standout deals was omnichannel jewellery platform Bluestone, which secured $71 million at a near-unicorn valuation of $964 million, making it the year’s largest D2C raise.
However, 2024 was also notable for what didn’t happen — no new unicorns emerged in the Indian D2C space. The sector remains capped at four unicorns: Lenskart, MyGlamm, Boat, and Licious. Mergers and acquisitions also slowed, with just 13 D2C exits recorded in 2024, down from 15 the year prior and 31 in 2022. Notable exits during the year included VCare Products, Max Protein, and Earth Rhythm.
On the global stage, India retained its position as the second-largest market for D2C startup funding, trailing only the United States. Bengaluru and Gurugram continued to dominate the domestic D2C map, together accounting for 55% of total capital inflow in 2024. The data paints a picture of an evolving D2C landscape — one where investors are increasingly looking for leaner, agile, and sustainable brands rather than chasing scale at any cost. While the funding frenzy may have cooled, the appetite for innovation, especially at the early stages, is far from over.