The halo effect carefully built up over the years — largely through the huge success in fundraising and humongous rise in valuations of many new-age businesses — came under strain during the year.

Widely seen by many as playing a catalytic role in the shaping of New India and the realisation of the Viksit Bharat goal, the startup arena witnessed both significant highs and lows in 2024, with the degree of each being open to interpretation.

The Highs And Lows

Chief among the highs was the abolition of the ‘angel tax’, which was perceived as coming in the way of investors pumping in money into local startups, besides the listing of several new-age businesses on the stock market, and a prominent former startup co-founder settling his differences with the company.

There also were fantastic future projections of the country’s startup ecosystem made by leading industry body CII, and the Hurun Research Institute.

Moreover, from the point of view of startup mentor and co-creator Kalyan Kar, the year saw a more “pragmatic approach being displayed in the valuation of startups”. This, in turn, forced startups to embark on tighter cost control measures, and focus more on profitability. “In the long run, this will be beneficial for startups,” Kar pointed out.

Additionally, in the words of venture capital and PE professional and IIT Alumni Council Social Impact Fund convenor Satish Mehta, 2024 marked the entry of “idea stage companies backed with massive capital commitments”. And many startups aspiring “for a billion-dollar valuation at the PowerPoint stage”.

Importantly, several startups with older founders materialised during the year to come up with India-specific solutions, to address the country’s myriad challenges. “The average age of an IIT Alumni Council promoter is 50+,” Mehta said.           

The announcement of the removal of the angel tax came in July as part of the full Budget for FY25, presented by Union Finance Minister Nirmala Sitharaman. In her speech, the FM explained that the decision on the abolition of angel tax was prompted by the aim to “bolster the Indian startup ecosystem, boost entrepreneurial spirit and support innovation”.

Earlier in March, CII had forecast that the startup and venture economy can likely contribute US$ 1 trillion to the Indian economy, and also add over 50 million jobs by FY2030. In June, a Hurun report forecast the likelihood of an additional 152 startups turning unicorns in the next 5 years.

Initial Public Offerings

Several startups, which included the likes of EV maker Ola Electric, food delivery platform Swiggy and fintech firm MobiKwik, came up with their initial public offerings (IPOs) during 2024. September 30 saw Ashneer Grover, a former judge of the Shark Tank India reality TV series, announce that he had reached a “decisive settlement” with fintech firm BharatPe, of which he is a co-founder.

Prominent among the many lows for Indian startups this year included continuing question marks around the quality of corporate governance, where hopes of an improvement had been raised following the release of a corporate governance charter for startups by CII in April, and right noises made throughout the year.

The year also saw trouble at Byju’s, which was once India’s most valued startup at US$ 22 billion, and one of the biggest showpieces of the country’s startup success. 

Additionally, 2024 saw the startup Koo — once billed as the Indian answer to the then Twitter (now X) — ceasing operations. One of the winners of the Aatmanirbhar Bharat App Innovation Challenge, Koo had even found mention in PM Modi's Mann Ki Baat address of August 2020.

Along with all the highs and lows, 2024 saw two interesting spectacles involving startup founders. The first was of Ola founder Bhavish Aggarwal getting into a row with a standup comedian on X, after the latter had commented about Ola Electric’s customer service.

The other was of Zomato founder Deepinder Goyal saying he wanted to hire a ‘chief of staff’, where the chosen person would have to pay Rs 20 lakh to the company for the learning opportunity at the organisation. Once the statement had garnered the desired media headlines and traction on social media, Goyal clarified he was hopeful that “pay the company to get a job” would not “become a norm in this world”, as it is not “cool”.

Wish List For 2025 

What could our wish list for the startup sector in the new year be, considering that it is a given that 2025 will see more startups seeking listings to raise funds, while providing an exit to some of their earlier investors?

Number One would be that at least some of our startups emerge as global benchmarks on customer service and satisfaction, with the investor fraternity, whom new-age companies look up to as their lighthouse, urging founders to go the extra mile to delight customers.

Next would be greater attention to corporate governance in the startup space, with robust systems and processes being put in place to ensure that its lack doesn't hold back sustained growth of the sector. Let's hope funders will be more visibly active in ensuring that governance receives its due importance at their investee entities.

Last but not the least, let's hope the investor fraternity takes more interest in local cleantech and climate tech startups. 

At the end of the day, there can be no question about the potential of startups to become a huge force for good for all in India. In 2025, ordinary citizens of the world’s most populous nation would be pinning their hopes on the promise that local startups will show greater willingness to take the big bets necessary.    

(The writer is a current affairs commentator. Views are personal)