India’s B2C e-commerce startups saw 200% funding growth in Q2 2024

India’s B2C e-commerce startups saw a 200 per cent growth in fundings, to scale $1.6 billion quarter-on-quarter between April and June, or the second quarter (Q2) of 2024, according to a new report by Tracxn, an online market intelligence platform that offers private market data.

The previous quarter saw startups securing funds worth $519.8 million while the year-ago figure was $577.4. Comparatively, the months of April, May and June this year comprise the most-funded quarter of 2024. Traxcn reports that the B2C e-commerce startup industry in the country has raised $2.5 billion Year to Date (YTD) at the end of the June quarter, which is more than the amount raised in 2023.

REASONS FOR GROWTH

Increasing digitisation in Tier-2 and Tier-3 cities, and a surge in use of online payment are being seen as big reasons for the phenomenal growth.

Positive investor sentiment, driven by an 8.2 per cent increase in GDP during the fiscal year 2023-’24 (FY24), has contributed to the funding surge, too, besides a growth in disposable income among the middle class.

COMPANIES THAT SCORED BIG

Zepto, the quick delivery company that has become a unicorn, contributed majorly to the funding growth, attracting $665 million YTD. Big funding rounds during the quarter included Flipkart with its $350-million Series J and Meesho’s $275-million Series F in May. Purplle garnered $120 million in its Series F round. Rapido, Oyo and Pocket FM saw substantial funding, too. These companies are expected to continue adding a push to the funding of B2C e-commerce startups in the remaining quarters of the fiscal year 2024-’25 (FY25).

The Economic Survey 2023-’24 has estimated that the value of the country’s e-commerce industry would be worth more than $350 billion by 2030, driven by initiatives such as Open Network for Digital Commerce (ONDC) and Unified Payments Interface (UPI), rise in demand within India and an overall consistency in growth.