India’s tech start-up ecosystem is shifting gears from chasing valuations to building with purpose. The 2024 Nasscom-Zinnov report reveals a rise in AI-first, deep tech, and revenue-focused ventures reshaping the future of digital innovation.
India’s tech start-up ecosystem is undergoing a quiet transformation. According to the newly released Nasscom-Zinnov Tech Start-up Report 2024, the focus is shifting from hypergrowth to resilience, relevance, and long-term impact, marking a significant evolution in the way startups are being built, funded, and scaled.
Despite global macroeconomic headwinds and a noticeable funding correction, India added over 1,300 new tech start-ups in 2023, bringing the total number to nearly 29,000 active start-ups. While the volume dipped compared to the previous two years, the nature and quality of new ventures are showing stronger fundamentals.
AI Takes Center Stage
A standout trend is the rise of AI-first start-ups. More than 25% of all new tech start-ups in 2023 have artificial intelligence at their core. From healthcare and fintech to edtech and logistics, AI is being deployed not just to improve efficiency but to drive innovation and build new business models.
Startups are aligning with India’s Digital Public Infrastructure (DPI), including the IndiaAI stack, to build scalable, inclusive, and secure digital solutions. The report also notes increased interest in agentic AI, small language models, and domain-specific AI products tailored to India’s diverse needs.
Deep Tech and SaaS Gaining Traction
Deep tech start-ups have doubled in share compared to the previous year. With a stronger focus on intellectual property and engineering-led innovation, deep tech ventures are seeing increased interest from both investors and enterprise buyers.
B2B SaaS continues to be a growth driver. The sector contributed significantly to early-stage activity, with a 30% increase in product-led SaaS models, especially in verticals like cybersecurity, climate tech, and automation.
A Shift in Start-up Mindset
One of the key insights from the report is a change in founder priorities. Around 55% of new founders are focused on revenue-first business models. Start-ups are emphasizing profitability, sustainable growth, and stronger customer value rather than chasing aggressive valuations.
This change is also reflected in investor sentiment. While overall deal volumes declined, investors showed a strong preference for start-ups with clear monetization strategies, compliance readiness, and technology depth.
Funding Landscape Rebalancing
India witnessed a 35% drop in total funding value in 2023 compared to 2022, but early-stage investments (Seed to Series A) showed greater resilience. Investors are now backing start-ups solving national challenges, including digital skilling, financial inclusion, agri-tech, and healthcare.
Despite the funding slowdown, India retained its position as the third-largest start-up ecosystem globally, reinforcing long-term investor confidence.
Outlook: Purpose-Led Growth Ahead
The report concludes that India’s tech ecosystem is entering a phase of purposeful and precision-led growth. With a stronger alignment to policy, public infrastructure, and deep tech capabilities, Indian start-ups are well-positioned to solve complex, large-scale challenges.
Nasscom President Debjani Ghosh emphasized, “This recalibration is essential. The Indian start-up ecosystem is maturing – not just scaling, but solving for India and the world.”
As AI, sustainability, and digital inclusion take center stage, the Indian IT and start-up landscape is no longer just chasing unicorn status – it’s building solutions that last and matter.