Despite growth-stage investments declining consistently since 2021 in terms of value, a sharp rise in the number of deals below $20 million has driven volumes to a record high of 388 deals in 2024, according to a report. The number of small deals constituted 65% of all growth-stage deals last year, the highest-ever, compared to 45% in 2023.

Growth-stage investments are raised by startups that are typically at Series B or C, have found a product-market fit, and need capital to reach their target customers. Funding at this stage can range anywhere between $20 million and upwards of $100 million. In 2024, growth deals fell to $10 billion from $15 billion in the preceding year, as the share of large $50 million+ deals shrank, the report added.

“The average deal size of growth-stage investments has halved and is back to the 2020 levels, signalling tempering valuations,” the report by Indian Venture and Alternate Capital Association (IVCA) and Praxis Global Alliance said. The average deal size in growth-stage rounds declined to $30 million in 2024 from $63 million in the year before that.

The report showed that the share of large $50 million+ deals shrank to 46% in 2024, in terms of value, from 76% in the year before that. In terms of volume, the decline was from 22% to 10% last year. Overall, growth equity accounted for one in every four private investment deals in 2024, with a total of 388 deals, up from 235 in 2023. 

“There is a significant growth investment opportunity with a $600-billion funding demand for potential Indian companies and only ~10% of active firms securing investor backing,” the report said.

Some of the large growth-stage deals in 2024 were Zepto’s $1-billion funding raised in two rounds, Physics Walla’s $210-million round, Rapido’s $200-million round, and Finnova Capital’s $135-million round, among others.

While the fundraising from growth-focused funds declined to about $3 billion last year, the share of growth-focused fundraising, in overall fundraising, has increased to a five-year high of 29%. Exits from growth-stage investments hit $4 billion, increasing about 33% from 2023, driven by rich valuations of public market exits.

In 2025, fundraising for growth-stage investing is expected to grow with exits maintaining its momentum. Besides IPO, secondary deals are also expected to increase with an increasing number of secondary funds and family offices being set up.

“It has been observed that public market returns have moderated, leading to more realistic valuations and increasing optimism for higher deal activity in the private market in the coming year,” the report said on the outlook for this year.