India’s alternate investment landscape is at a strategic juncture with companies shifting from inception to IPOs and strategic exits. The journey was nothing short of extraordinary from the early days of predictive investment to the modern data-driven and value-influenced decision making. There has been a shift from the B2C model to the robust and scalable B2B model of businesses.

The 16^th edition of the VCEdge Annual Report based on the investor activity till 22^nd November 2024 shows B2B start-ups continued their leads in 2024, raising 40% more than the B2C segments, the former generated $10.4 billion from 579 deals and the latter generated $7.5 billion from approximately 472 deals. While the combined model lagged raising $4.7 billion in 2024.

Private Equity Deal activity in 2024 experienced a decline of 9% in both deal volume and value, indicating cautious behaviour, while there has been a decline in both deal volume and deal value. The fall is not as steep as the one from 2022 to 2023.

Smaller transactions in 2024 continued to dominate the Private Equity deal volume. There was a decline in the deal value of $100 million+. The deals between $25-$50 million increased by 29%, increasing their share by 12% up from 9% in 2023.

Consumer sectors face challenges, material grow on volume and value. IT remains the dominant player in 2024 despite a 20% downturn in volume, accounting for 50% of all private equity deals. Consumer Discretionary and Consumer Staples experienced a decline in deal activity, decreasing 11% and 14% respectively in volume.

Angel Seed investments, while dominant in deal volume, fell by 18% in 2024 compared to 2023, signalling investor caution in new ventures. Whereas venture capital activity maintained a stable trajectory representing 30% of the deal volume in 2024, like its share in 2020.

Series B and Series E+ funding rounds showed significant growth in volume with increases of 22% and 85% respectively. Series A remained the dominant, accounting for 50% of all VC deals with 142 deals. This depicts a balanced investor approach to investing in early-stage startups as well as supporting expansions and exit opportunities.

In 2024, there were a total of 615 domestic mergers and acquisitions (M&A). The value of outbound M&A transactions increased by 24% compared to the previous year. The average size of M&A deals reached $47.1 million. Additionally, the year saw 359 initial public offerings (IPOs), representing the highest number in five years. The value of IPOs surged by 1.6 times, with the financial sector contributing a substantial $9.3 billion. Furthermore, the value of qualified institutional placements (QIPs) rose by 96% relative to 2023. The overall exit deal value for 2024 amounted to $11.9 billion, with the Open Market being the most frequently utilized exit strategy. In the financial sector, there were 33 partial exits recorded during the year. However, the volume of secondary sale exits experienced a significant decline of 65%.

E-commerce emerged as the leading sector in terms of activity, surpassing FinTech. Both Travel & Mobility Tech and Health Tech saw notable increases in deal volume. While E-commerce led in value among new-age sectors, FinTech continued to show a downward trend.