Startup funding rebounds but recovery lags: Grapes Worldwide CEO warns

Indian startup funding showed signs of recovery in May, rising to $1.14 billion across 98 deals, a 53% increase from April's $745 million, according to Entrackr. However, the rebound is not enough to signal a full sector recovery.

Shradha Agarwal, Co-Founder and Global CEO of Grapes Worldwide, cautions, "Though startup funding rebounded in May, it is still far away from driving the complete recovery of the sector." This cautious outlook reflects ongoing financial challenges faced by startups and their marketing partners.

Marketing budgets remain conservative as agencies and media platforms continue to face margin pressures and delayed client payments. Media planners note, "Until consistent capital flow returns, marketing budgets from the startup cohort are likely to stay conservative, keeping the pressure on agencies and media platforms alike."

The broader advertising market also reflects slower growth than expected. The Pitch Madison Advertising Report (PMAR) had forecast 12% growth for 2024, targeting ₹1.11 lakh crore, but actual growth ended at only 8%, totaling ₹1.08 lakh crore.

This data underscores the cautious optimism in the startup ecosystem, where funding is improving but still insufficient to fully revive marketing spend and sector momentum.

Key stats:
- $1.14 billion raised in May across 98 deals
- 53% increase from April's $745 million
- Advertising growth forecast: 12% vs actual 8% in 2024
- Advertising market size: ₹1.08 lakh crore actual vs ₹1.11 lakh crore forecast

The startup sector's recovery remains fragile, with funding rebounds not yet translating into robust marketing investments or agency stability.

Indian startup funding rebounded to $1.14 billion in May, a 53% increase from April's $745 million, but recovery remains slow. Grapes Worldwide CEO Shradha Agarwal warns the sector is far from full recovery amid conservative marketing budgets and ongoing financial pressures on agencies and platforms.