The Indian startup ecosystem witnessed a significant slowdown in mergers and acquisitions (M&As) during the first half of 2024. According to the ‘Indian Tech Startup Funding Report H1 2024,’ only 37 M&A deals materialized, representing a sharp decline of 45% compared to 67 deals struck in H1 2023. This also marks a 34% decrease from the 56 M&A deals recorded in H2 2023. In fact, this signifies the lowest number of M&A transactions in a six-month period since the COVID-hit H1 2020, which saw only 35 deals.
Nazara Technologies Emerges as the Most Active Player
Despite the overall decline in M&A activity, listed gaming major Nazara Technologies emerged as the most active player in the startup ecosystem. Driven by a desire to expand its global footprint and diversify its offerings, Nazara’s subsidiary NODWIN Gaming embarked on an acquisition spree. Their first half of 2024 acquisitions included Comic Con India, the esports platform Ninja Global, and increased stake ownership in Publish.Me, Branded, and Freaks 4U Gaming (reaching 100% ownership).
Additionally, Nazara’s subsidiary Absolute Sports acquired Pennsylvania-based entertainment news site Soap Central for $1.4 million in June. Their acquisition activity has continued into the second half of the year, with a recent purchase of additional shares in Paper Boats apps, increasing their ownership to 100%.
Media & Entertainment Leads Sectoral Consolidation
The gaming sector wasn’t the only one experiencing consolidation. Bolstered by Nazara’s activities and another prominent player, OneVerse Gaming, which made three acquisitions in H1 2024, the media and entertainment sector led in M&A activity with a total of nine deals. Enterprise technology and fintech followed closely with eight deals each. Notably, the largest acquisition during this period was SaaS giant Freshworks’ purchase of enterprise tech startup Device42 for a staggering $230 million. Another significant acquisition involved existing investor Finnest acquiring cloud kitchen platform Kitchens@.
Funding Dips Slightly, But Optimism Remains
While M&A activity took a hit, funding for Indian startups remained relatively stable. In the first half of 2024, startups cumulatively raised $5.3 billion, representing a minor 1.8% decline compared to $5.4 billion in the same period last year. However, there’s optimism for a rebound. According to an Inc42 survey, ‘India’s Top Startup Investor Ranking H1 2024 Survey,’ over 93% of surveyed investors anticipate 2024 to be a turnaround year for Indian startups. They believe that the performance of the Indian public market will significantly improve funding trends going forward.
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