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Indian D2C startups witnessed a second consecutive year of funding decline in 2024, according to a recent report by Tracxn, a leading market intelligence platform. The direct-to-consumer
sector raised just $757 million in 2024, an 18% drop from $930 million in 2023 and a steep 54% fall from the $1.6 billion raised in 2022.
“The D2C space witnessed its peak funding in 2021 and 2022, after which the funds started to decline steadily, and 2024 became the least funded year since 2021,” the report said.
“Investors (are) prioritising profitability and sustainable growth. Overall funding has declined due to investor caution and broader economic tailwinds,” said Neha Singh, Co-Founder Tracxn,
in a statement.
Yet, funding numbers remain better than those of China, the UK, and Italy, placing India second globally, just after the US, as the most funded country.
While early- and seed-stage funding increased, the overall decline in total funding was primarily driven by a sharp drop in late-stage investments, which fell by half, from $526 million in
2023 to $261 million in 2024, and were down 71% from the $912 million raised in 2022.
“The decline in funding can be attributed to increased investor caution amid a global economic slowdown, the oversaturation of similar brands, and fluctuating unit economics driven by high
customer acquisition costs. Additionally, D2C brands are facing challenges such as expensive offline expansion and pressure to be profitable, leading many to seek acquisitions as viable exit
strategies,” the report stated.
Early-stage funding rose by 25% to $355 million, and seed-stage funding surged 18% to $141 million during the same calendar year. Both, however, did not match their 2022 levels.
India is home to nearly 11,000 direct-to-consumer (D2C) companies, yet only around 800 have secured funding to date. According to the report, the most funded segments within the D2C
landscape were organic beauty, online jewellery, and beauty brands. D2C organic beauty brands collectively raised $105 million in 2024, marking a sharp 79% increase from $58.5 million in
2023. Online jewellery brands secured $94.8 million, representing a 15% decline compared to the $112 million raised the previous year. Meanwhile, D2C beauty brands garnered $56.1 million in
funding, up 7% from $52.4 million in 2023. BlueStone led the pack in 2024, raising $71 million in a Series D round at a valuation of $964 million.
Bengaluru emerged as the top city for D2C funding in 2024, attracting $253 million, followed by Gurugram with $164 million and Mumbai with $99.8 million.
Notably, India’s D2C ecosystem has produced only four unicorns so far including Lenskart, MyGlamm, boAt, and Licious.
While India continues to face a funding slowdown in the D2C space, ongoing government initiatives, such as the Open Network for Digital Commerce (ONDC), the Export Promotion Mission, and the
Government e-Marketplace (GeM), are keeping founders hopeful for a revival in funding in the coming years.
