Time taken for startups to get Series A funding longest in over a decade

Waiting for institutional round of financing could extend to 86 months compared to 81 last year

It is taking Indian startups longer to get initial funding.

The time taken to get Series A funding, typically the first time a startup raises institutional capital, extended to 86 months in 2024, according to a ‘Business Standard’ analysis of data collated from sector tracker Tracxn. That is the longest waiting time in data stretching back to 2014. It was 81 months in 2023, and 67 months in 2019 before Covid-19 (chart 1).

Startups typically begin work by borrowing from friends and family and seek institutional financing when they expand and capital requirements increase. Series A is the first institutional round.

Nine of the top ten sectors in terms of funds raised in 2023 waited longer for their first institutional funding. Consumer-based startups had the longest waiting period in moving from founding stage to Series A. The time increased from 48 months in 2019 to 65 months in 2024. Enterprise applications were next, followed by auto tech, transportation and logistics tech, high tech, and fintech. Each sector’s waiting time increased from four to 18 months compared to 2019 for their first Series A round. For fintech, the time increased from 51 to 54 months (chart 2).  

While startups are waiting longer, the size of funding rounds has gone up. The average Series A funding in 2014 was $5.5 million and increased to $7.5 million in 2024 (chart 3).

A so-called funding winter stretched cycles . The industry received its lowest funding of, $27.6 billion, in 2023 since 2015. It was $54.9 billion pre-pandemic, and peaked at $69.5 billion in 2021.

Globally, the time from a startup’s founding to getting Series A funding stretched to 80 months in 2023. It was 75 months in 2019 and was longer before. It touched 81 months in 2017 and 85 months in 2018. The average Series A funding round has also grown globally. It was $10.1 million in 2019. This rose to $12.4 million in 2023. The peak was $15.2 million in 2021.