Top Startup News Today: Stories, Shifts and Signals Shaping the Ecosystem | 24th December

On any given day, India’s startup ecosystem throws up a mix of ambition, resilience, caution and reinvention. From AI quietly reshaping how millions shop online, to artists turning heritage into global livelihoods, from billion-dollar funding cheques to hard questions around employee wealth and public market discipline—the ecosystem is constantly evolving.

The latest developments from across the startup and innovation landscape underline one clear reality: 2025 has been a year of recalibration. Growth is no longer enough on its own. Technology must solve real problems, capital must find credible businesses, and companies—both private and listed—are being held to a far higher standard.

Here’s a deep dive into the most important stories shaping the Indian startup ecosystem right now.

Top Startup News Today

How AI Is Quietly Changing the Way India Shops Online

Artificial intelligence is no longer a futuristic buzzword in retail—it is becoming the invisible engine behind how consumers discover products. As shoppers move beyond keyword searches, voice commands and image-based discovery are fast becoming part of everyday online buying behaviour.

At the centre of this shift is Target in India (TII), the global capability centre of US retail giant Target. The company is leveraging AI not just to improve search, but to redefine how customers find what they didn’t even know they were looking for.

In an interaction with EnterpriseStory, Swapnasarit Sahu, Senior Director – Data Sciences at Target in India, explained how AI-powered systems are enabling highly specific, contextual product recommendations. By analysing intent, behaviour and patterns, these systems are helping create shopping experiences that feel intuitive rather than transactional.

For retailers, this is more than a tech upgrade—it is a response to a fundamental shift in consumer expectations. Shoppers now expect platforms to “understand” them, and AI is quickly becoming the bridge between intent and experience.

From a Bihar Village to the World: A Family’s Mission to Take Madhubani Art Global

Not all startup stories begin with venture capital decks and accelerators. Some begin in villages, classrooms and kitchens—and grow through sheer determination.

Asha Jha’s journey from Madhubani, Bihar, is one such story. Raised in the heartland of the Mithila painting tradition, Jha grew up watching her mother and grandmother bring stories to life through intricate art. Yet, like many women of her generation, she initially chose education over enterprise, earning a master’s degree in Home Science.

Life, however, had other plans.

Both Jha and her husband worked as lecturers in government-aided colleges, but months without salaries pushed the family into severe financial strain. With five daughters to educate, all dependent on loans, the pressure was relentless. Determined to secure a better future—especially English-medium education for her daughters—Jha turned back to the art she had grown up with.

Today, alongside her daughters, she is taking Madhubani art to global audiences, transforming a traditional skill into a sustainable livelihood. The story is a powerful reminder that entrepreneurship in India often emerges from necessity—and that cultural heritage, when nurtured, can become a global economic opportunity.

Venture Capital in 2025: Fewer Big Bets, But Conviction Remains

While headlines often suggest caution, venture capital did not disappear in 2025—it became more selective.

Data from Tracxn shows that 22 startups raised over $100 million this year, down from around 35 in 2024. The decline reflects a broader slowdown in late-stage and growth funding, even as major VC firms such as Accel and Nexus Venture Partners closed new funds.

One familiar name continued to stand out. Zepto, which made waves in 2024 with a $1.3 billion funding spree, continued to raise capital in multiple rounds in 2025, pushing its valuation to $7 billion.

Interestingly, even as climate-tech deal flow thinned, electric vehicle startups continued to attract serious capital. In March, Erisha E Mobility raised a massive $1 billion Series D round from an undisclosed UAE-based industrial investor, reinforcing long-term confidence in India’s EV manufacturing ambitions.

The message from investors is clear: capital is still available, but only for companies with scale, clarity and conviction.

The Unacademy ESOP Moment: When Paper Wealth Meets Harsh Reality

For thousands of startup employees, ESOPs symbolise upside and ownership. But at Unacademy, that promise has collided with uncomfortable trade-offs.

The edtech company recently asked exited employees to exercise their vested ESOPs within a short window, citing ongoing talks for an all-stock merger or acquisition at a valuation significantly lower than the capital raised earlier.

While management argues that exercising options could keep employees eligible for equity in the merged entity, experts and former employees warn of the risks. Exercising ESOPs triggers an immediate tax liability on illiquid shares, with no guarantee of eventual returns—especially once investor protections come into play.

The episode has reopened a critical conversation in India’s startup ecosystem: Are employees truly prepared for the financial and tax realities of startup equity?

Public Markets in 2025: Where Hype Gave Way to Hard Numbers

If private markets once rewarded ambition, 2025 was the year public markets demanded proof.

The performance of India’s listed new-age and internet companies reflects a clear shift in investor mindset. Businesses that showed visible profitability—or at least a credible, time-bound path to it—outperformed peers that chased growth across too many adjacent categories.

Operational clarity, focused execution and strong unit economics emerged as the defining traits of winners. The message from markets was unmistakable: storytelling alone no longer works—durable business models do.

Funding Spotlight: Prosperr.io Bets on AI-Led Tax Infrastructure

In a market hungry for efficiency, Prosperr.io is building infrastructure for one of India’s most complex pain points—tax compliance.

The Bengaluru-based fintech SaaS startup raised $4 million in a seed round led by Jungle Ventures, with participation from Yatra Angel Network, Sadev Ventures and other investors. Founded in 2022 by Manas Gond and Dev Kumar, the company has now raised $5.55 million in total.

Prosperr.io offers AI-powered, subscription-based tax solutions for salaried individuals, along with enterprise tools for reimbursements and tax-saving allowances. The fresh capital will be used to deepen product capabilities, strengthen B2B sales and expand into adjacent areas such as wealth management.

Garuda Aerospace Scales Up with Salesforce Partnership

As Indian startups scale globally, backend systems are becoming just as important as hardware.

Garuda Aerospace, one of India’s leading drone manufacturers, has partnered with Salesforce to streamline customer lifecycle management across marketing, sales and service functions. By deploying Salesforce’s Agentforce platforms, Garuda aims to unify operations across B2G, B2B and B2C segments.

The implementation will impact over 90% of Garuda’s customer base and support expansion into Southeast Asia and Africa. As the company grows its footprint in agriculture, defence and infrastructure, the move aligns with its broader ambition to build a full-stack drone ecosystem.

Tamil Nadu Bets Big on Space-Tech Startups

Tamil Nadu is making a targeted push into the space economy.

The Tamil Nadu Startup and Innovation Mission (StartupTN) has launched the Tamil Nadu Space Tech Fund, a 1:1 matching equity scheme offering up to Rs 50 lakh per startup. With a total allocation of Rs 10 crore for FY 2025–26, the fund aims to support space-tech ventures across satellite systems, launch technologies, propulsion, robotics and space data analytics.

Funding will be milestone-based, guided by an expert committee, and is open to DPIIT-recognised startups registered in the state—strengthening Tamil Nadu’s position as a serious space-tech hub.

Together, these stories reflect an ecosystem at a crossroads. Innovation is deepening, capital is becoming disciplined, and founders—along with employees—are being forced to think more clearly about sustainability, ownership and long-term value.

India’s startup journey is no longer just about building fast. It’s about building right.