Indian Startups Raise $1.65 Bn in Feb: Funding Surge Despite Y-o-Y Dip

India’s startup ecosystem continues to attract significant investment, with February 2025 witnessing a robust $1.65 billion (approximately ₹14,418 crore) in funding, according to data from Traxcn. Despite a year-on-year decline from $2.06 billion raised in February 2024, the numbers show a promising 19.5% increase from January 2025’s funding of $1.38 billion. This upward trend, coupled with notable acquisitions and IPOs, signals strong investor confidence in the Indian startup landscape. TICE presents key funding data to decode this funding surge. 

A Booming Startup Ecosystem: Where is the Money Flowing?

Over the first eleven months of FY25 (April 2024 - February 2025), Indian startups amassed $25.4 billion through 2,200 funding rounds, demonstrating a continued appetite for innovation and entrepreneurship. The median valuation of startups raising funds in February stood at $83.2 million, highlighting the growing scale of investment in the ecosystem.

Bengaluru emerged as the frontrunner in securing startup investments, garnering $353 million with a median round size of $2 million. Often dubbed as India’s Silicon Valley, the city remains a hotspot for tech-driven startups and venture capital activity. Mumbai followed suit, raising $102 million, although with a higher median round size of $5 million, indicating the presence of larger ticket deals in the financial capital.

Biggest Funding Rounds: Oxyzo and Udaan Take the Lead

Among the major funding deals in February, fintech firm Oxyzo stood out by securing a whopping $1 billion in conventional debt. This substantial funding highlights the rising demand for alternative lending solutions in the Indian market. Close behind was B2B e-commerce platform Udaan, which successfully raised $75 million in a Series G equity round led by M&G Plc.

Several other startups also secured noteworthy investments, including:

• SpotDraft (LegalTech)

• Cashfree Payments (Fintech)

• Zeta (BankingTech)

• Geniemode (B2B Commerce)

The median funding round size in February was reported at $1.92 million, indicating strong investor participation across early and growth-stage startups.

Acquisitions and IPOs: February's Major Moves

February wasn’t just about funding—it was also a significant month for mergers, acquisitions, and public listings. Among the key acquisition deals:

• Head Digital Works acquired Deltatech Gaming (parent company of Adda52) for ₹491 crore, strengthening its foothold in the online gaming sector.

• Bengaluru-based SaaS firm Perfios took over fraud detection platform Clari5, signaling increased activity in financial technology consolidation.

• Motilal Oswal Alternate Investment Advisors (MO Alts) acquired a majority stake in Megafine Pharma for ₹460 crore, emphasizing growing investor interest in healthcare and pharmaceuticals.

Meanwhile, the IPO market remained vibrant, with 16 companies making their stock market debut. The median IPO market capitalization was reported at $26.5 million. Notable IPOs included:

• Hexaware (IT Services)

• AJAX (Manufacturing)

• Ken India (Insurance)

• Dr. Agarwal's Eye Hospital (Healthcare)

• Royal Arc (Engineering)

Who is Investing? The Top Players in the Funding Game

Prominent angel investors played a crucial role in fueling the funding activity. Leading the pack were:

• Ritesh Agarwal (OYO Founder)

• Anupam Mittal (Shaadi.com)

• Aman Gupta (boAt)

• Peyush Bansal (Lenskart)

Among venture capital firms, key players included:

• Blume Ventures

• Eximius Ventures

• Unicorn India Ventures

• Peak XV

• Accel

• Nexus Venture Partners

Funding Trends: How 2025 Compares to Previous Years

While the Indian startup ecosystem continues to thrive, a comparison with previous years shows a nuanced picture. In 2024, Indian startups collectively raised $30.4 billion, marking a slight 6.5% decline from the $32.5 billion secured in 2023. This dip, however, doesn’t necessarily indicate a slowdown but rather an evolving funding landscape characterized by more selective investments and increased focus on profitability.

The Road Ahead: Optimism Amidst Challenges

Despite market fluctuations, industry experts remain optimistic about the future of startup funding in India. The sustained interest from venture capitalists, coupled with an increasing number of IPOs, suggests that investors are willing to bet on scalable and high-growth ventures. Additionally, sectors like fintech, health tech, SaaS, and deep tech continue to witness strong investor backing.

As 2025 progresses, startups must adapt to changing market dynamics, focusing on sustainable growth, innovation, and financial prudence. With Bengaluru leading the charge and investor sentiment holding strong, India’s startup ecosystem is poised for another year of dynamic evolution.