No new unicorns in 2024, but early-stage D2C startups grow

India’s direct-to-consumer (D2C) startup ecosystem saw a sharp funding decline in 2024, reflecting shifting investor sentiment amid global uncertainty and domestic market saturation. According to Tracxn, total investments fell to US$757 million—an 18% drop from US$930 million in 2023. The trend signals a market correction, with investors now prioritizing sustainability and profitability over rapid growth.

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India’s direct-to-consumer (D2C) startup ecosystem, which once dazzled investors with exponential growth and unicorn valuations, witnessed a significant funding slowdown in 2024. According to a report by private market intelligence firm Tracxn, the sector raised US$ 757 million during the year—an 18% decline from the US$ 930 million recorded in 2023. The drop becomes even more pronounced when compared to 2022’s high of US$ 1.6 billion, signaling a sharp correction and a shift in investor sentiment.

This recalibration does not indicate a collapse of confidence but rather a pivot in investor strategy. As the market matures, funders are becoming more discerning, placing their bets on early-stage companies that demonstrate agility, innovation, and a path to sustainable profitability. In fact, early-stage funding in 2024 rose to US$ 355 million, up 25% year-on-year. Seed-stage startups also experienced a resurgence, attracting US$ 141 million—a notable 18% increase from 2023.

This trend marks a change in the playbook. In previous years, large late-stage rounds and inflated valuations dominated headlines. However, in 2024, late-stage funding plummeted to US$ 261 million, marking a dramatic 50% year-on-year decline. The pullback reflects growing concerns about profitability, escalating customer acquisition costs, and saturated categories. As consumer behavior normalizes post-pandemic and the digital surge steadies, investors are opting for caution over exuberance.

Nonetheless, some verticals within the D2C space continue to thrive. Organic beauty, personal care, and online jewellery brands remained resilient and even attractive to investors. These sectors, driven by growing consumer demand for clean, sustainable, and niche offerings, bucked the funding trend. The standout deal of the year was omnichannel jewellery brand Bluestone, which raised US$ 71 million at a valuation close to unicorn status— US$ 964 million. It was the largest D2C deal in India in 2024 and underscored the growing allure of premium, experience-driven consumer brands.

Despite such bright spots, 2024 also stood out for what didn’t happen—no new unicorns emerged in the Indian D2C space. The club remains restricted to four stalwarts: Lenskart, MyGlamm, Boat, and Licious. This reflects both the tightening funding environment and a more rigorous scrutiny of business fundamentals. Gone are the days when sky-high valuations were handed out in anticipation of future scale. Today, unit economics, customer retention, and profitability matter more than ever.

Mergers and acquisitions, another key indicator of market maturity and consolidation, also slowed down. Only 13 D2C exits were recorded in 2024, down slightly from 15 in 2023 and a far cry from the 31 in 2022. Some notable exits included VCare Products, Max Protein, and Earth Rhythm—brands that have managed to build strong consumer loyalty and strategic relevance.

Globally, India retained its position as the second-largest market for D2C startup funding, behind only the United States. Within India, Bengaluru and Gurugram continued to be the epicenters of D2C innovation and investment, together accounting for 55% of total capital inflows. These cities benefit from a combination of strong startup ecosystems, digital infrastructure, and consumer sophistication.

The broader funding slowdown also mirrors global trends, where macroeconomic uncertainties, inflationary pressures, and geopolitical tensions have forced investors to tighten their belts. In India, these global headwinds have been compounded by local factors like increased competition, regulatory scrutiny, and changing consumer preferences. As a result, startups are being forced to operate leaner, with sharper focus on core metrics.

Yet, amid this funding winter, there is cause for optimism. The shift toward early-stage funding suggests that the D2C ecosystem is undergoing a healthy evolution. Rather than chasing growth at all costs, the focus is now on building agile, resilient, and purpose-driven brands that can stand the test of time. The appetite for innovation is alive and well—it has simply become more disciplined.

As 2025 unfolds, industry watchers expect a continued emphasis on product differentiation, digital-first go-to-market strategies, and deeper consumer engagement. Brands that can build trust, create value, and operate efficiently are likely to emerge stronger from this period of correction.