India’s Tech Startups Weather Funding Slowdown, Retain Third Place Globally

India’s tech startup landscape continues to shine on the global stage, holding its position as the third-largest ecosystem worldwide in venture capital funding in 2025. According to a recent Tracxn report, Indian startups raised $7.7 billion during the first nine months of the year. While this is a notable decline from the $10.1 billion raised during the same period in 2024—a 23% drop—it still places India ahead of other major European ecosystems like Germany and France, trailing only the US and the UK.

Funding Trends: Fewer Deals, Bigger Cheques

The slowdown was evident across funding stages. Seed-stage investments fell sharply by 39% to $727 million, while early-stage funding dipped 10% to $2.7 billion. Late-stage investments, which generally attract the largest capital, experienced the steepest decline, dropping 27% to $4.3 billion from $5.9 billion last year.

Yet, amidst this contraction, there is a silver lining. The median funding round size doubled in 2025 to $1.5 million, compared to $683,000 in 2024. This indicates a shift in investor strategy—larger capital injections for fewer startups, favoring quality over quantity.

Several high-profile funding rounds highlighted the year. Notably, Erisha E Mobility secured a massive $1 billion in Series D funding, GreenLine raised $275 million in Series A, and Infra. Market closed $222 million in Series F. Other prominent rounds included Access Healthcare and Groww, reflecting sustained investor confidence in the sector’s potential.

Sector-Wise Insights

Certain sectors managed to buck the slowdown trend. Enterprise Applications emerged as the top-funded segment with $2.3 billion, while Retail and Transportation & Logistics Tech also saw notable increases in total funding, reaching $2.0 billion and $1.79 billion respectively. These gains suggest that investors are increasingly focused on sectors with scalable business models and tangible market impact.

Conversely, digital lending startups faced challenges, with investments dropping 21% to $324.8 million in 2025, highlighting the selective nature of capital allocation in risk-heavy areas.

A Maturing Ecosystem: Exits and IPOs

India’s startup ecosystem is showing signs of growing maturity. In the first nine months of 2025, 110 startup exits were recorded—a 15% increase from 96 in the same period last year. Leading deals included Resulticks’ $2 billion acquisition by Diginex, Magma General Insurance’s $516 million buyout by DS Group, and Patanjali Ayurved.

Public market activity remains healthy. A total of 26 companies pursued IPOs or secondary offerings, including Urban, DevX, BlueStone, and iCodex. Enterprise Applications and Real Estate & Construction Tech drove most of these listings, while Energy Tech saw growing investor interest with five new IPOs.

“India climbing to the third rank globally reflects the resilience and adaptability of our startup ecosystem. What we are witnessing is a clear shift toward maturity, with rising acquisitions, steady IPO activity, and continued unicorn creation providing balanced exit pathways for founders and investors,” said Neha Singh, Co-Founder of Tracxn.

Unicorns and City-Level Trends

The first nine months of 2025 saw four new unicorns emerge in India, bringing the total count to 122. Of these, 22 have already exited through acquisitions or public listings. Bengaluru continues to dominate as the startup capital, hosting 53 unicorns, followed by Gurugram with 20 and Mumbai with 18. On a funding level, Bengaluru and Delhi together accounted for nearly half of the total investment, at 31% and 18% respectively.

Leading Investors

The report also highlighted the key players shaping India’s startup funding landscape. LetsVenture, AngelList, and Accel were recognized as the top all-time investors in the country. At the seed stage, Inflection Point Ventures, Venture Catalysts, and Antler led the way. Early-stage funding was dominated by Peak XV Partners, Vertex Ventures, and Accel, while late-stage investments were led by Premji Invest, Sofina, and SoftBank Vision Fund.

While the year has seen a funding slowdown, the Indian startup ecosystem’s fundamentals remain robust. Larger median deal sizes, active IPOs, record acquisitions, and continued unicorn creation underscore an ecosystem maturing rapidly and attracting increasingly strategic investments. As the year progresses, the focus is expected to shift toward sustainable growth, innovation, and global competitiveness, cementing India’s position as a critical hub in the global startup map.