Karnataka’s startup ecosystem may have seen a dip in funding in 2024, but Bengaluru continues to cement its position as the nerve centre of India’s tech innovation. According to data from Tracxn, tech startups in the state raised $3.7 billion in 2024 — a 24% decline from the $4.9 billion secured in 2023, and significantly lower than the $11.7 billion recorded in 2022.
Early-stage investments showed resilience with a 10% year-on-year rise to $1.1 billion, indicating investor confidence in the next generation of companies. However, both seed-stage and late-stage funding took a hit, dropping 18% and 32% respectively. Despite the broader slowdown, Bengaluru alone accounted for almost all of Karnataka’s funding activity, with Mysuru and Tiptur trailing far behind.
Retail, enterprise applications, and transport and logistics emerged as the top three sectors attracting investor interest. Flipkart and Meesho led the funding charts, raising $350 million and $275 million respectively. Other major deals included Rapido’s $200 million funding round, pointing to continued optimism in mobility and e-commerce platforms.
The city also saw the birth of six new unicorns — Krutrim, Perfios, Porter, Rapido, Ather Energy, and Money View — underlining Bengaluru’s position as a breeding ground for billion-dollar companies. In fact, all unicorns minted in India this year have come from Bengaluru.
The year wasn’t without exits. Eight startups from Karnataka went public in 2024, including well-known names such as Swiggy, Ola Electric, and Digit Insurance. On the acquisition front, 49 deals were reported, with iBUS and Loyal Hospitality among the most high-profile buyouts.
International and domestic investors continued to bet big on the region. Accel, Elevation Capital, and Peak XV Partners dominated early-stage rounds, while SoftBank Vision Fund and other large global investors remained active in late-stage deals.
While funding levels have tapered, industry experts believe that the correction could benefit startups in the long run by instilling greater capital discipline and focus on profitability. With government-backed initiatives like the Startup India Seed Fund Scheme and continued tax incentives for new businesses, Karnataka’s tech ecosystem is expected to weather current headwinds and stay a dominant force in India’s startup landscape.