India’s direct-to-consumer (D2C) startups raised $757 million in 2024, reflecting an 18% year-on-year dip from the $930 million secured in 2023, according to a report by Tracxn. Compared to the 2022 peak of $1.6 billion, the sector’s funding has now dropped by more than half.
Despite the overall funding slump, early and seed-stage investments are on the rise, suggesting that investor conviction remains strong for newer D2C entrants. Early-stage startups bagged $355 million, a 25% jump over 2023, while seed-stage startups attracted $141 million, up 18% from the previous year.
The decline in overall investments stems from investor caution amid global economic headwinds, combined with market saturation, rising customer acquisition costs and shaky unit economics, Tracxn noted.
Top-performing segments in 2024 included organic beauty brands, online jewellery platforms and personal care startups. Notably, omnichannel jewellery brand Bluestone raised $71 million at a $964 million valuation, marking the largest D2C round of the year.
Yet, the ecosystem failed to produce any new unicorns in 2024. The Indian D2C space remains limited to just four unicorns, that is Lenskart, MyGlamm, Boat and Licious.
Late-stage funding, in contrast, plummeted to $261 million, half of what was raised in 2023, indicating a slowdown in big-ticket bets on more mature brands. M&A activity also declined, with 13 acquisitions in 2024 compared to 15 in 2023 and 31 in 2022. Notable exits included VCare Products, Max Protein and Earth Rhythm.
Still, India maintained its rank 2 global ranking in D2C startup funding, trailing only behind the US. Within India, Bengaluru and Gurugram led the charge, accounting for a combined 55% of total funding.