Startups taking longer to hit Series A stage, fintech sees dip in avg time

Startups are taking longer to progress to key funding stages than before.

On an average, startups took 93 months in 2024 (as of June-end) to move from the founded to Series A stage, the longest duration since 2014, according to a Business Standard analysis of data from startup tracker Tracxn. The Series A stage typically represents the first round of institutional funding for startups.

This figure was 80 months in 2023 and 72 months the year before. The pre-pandemic average was 65 months (chart 1). Initially, startups rely on funding from friends and family or angel investors before securing institutional funding at the Series A stage, followed by Series B, C and so on.

An analysis of 10 sectors that received the most funding in 2023 shows that nine of them experienced an increase in the time taken to reach Series A compared to 2019.

Food and agriculture tech startups took the longest, that is, 95 months on average in 2024, followed by retail (92 months), environment tech (89 months), and consumer and enterprise applications (83 months each).

Fintech recorded a decline in average time from 54 months in 2019 to 51 months in 2024.

The increase in the average time taken to get their first institutional funding was the highest for consumer and retail startups, each of which saw a 34-month increase over 2019. Consumer startups now take 83 months to get to Series A, compared to 49 months in 2019. It has increased to 92 months for retail ventures from 58 in 2019 (chart 2).

The size of Series A funding rounds has dropped to $6.9 million as of June 2024 from $7.2 million on an average in 2023. Although it has declined from the 2022 and 2021 levels, the amount remains higher than pre-pandemic figures ($5.7 million) as seen in chart 3.