Top Startup News Today: The Government, Funding and Innovation Forces Driving India’s Startup Growth

Top Startup News Today

StartupTN Launches Rural Startup Communities in Eight Villages

StartupTN has introduced rural startup communities in eight villages across central Tamil Nadu under the Gramam Thorum Puthozhil (GTP) scheme to decentralize tech-driven entrepreneurship beyond Tier-II cities. In the first phase, Trichy and Thanjavur hubs identified four villages each to support rural innovators through financial aid, workshops, and mentorship. Each community will receive up to ₹1 lakh in subsidies, with guidance on funding, GST filing, and market access. The initiative focuses on IT, fintech, and value-added food production, aiming to create local jobs and bridge the rural-urban innovation gap. The state targets 100 villages through 10 hubs in future phases.

NIDHI Yojana Empowers Women Entrepreneurs in Uttar Pradesh

Under the leadership of Hon’ble Chief Minister Shri Yogi Adityanath, Uttar Pradesh is emerging as a hub for innovation and entrepreneurship. Through the central government’s NIDHI Yojana, 25 women-led startups in the state have received financial and technical support, fostering growth in Tier 2 and Tier 3 cities. The scheme, launched by the Department of Science and Technology, provides early-stage assistance to science and technology-based ventures. With seven Technology Business Incubators and Inclusive TBIs established in UP, women entrepreneurs now have access to mentorship, IP guidance, and regulatory support. This initiative is driving self-reliance and creating a strong foundation for women-led innovation.

IN-SPACe Chairperson Shri Pawan Goenka on Building India’s Private Space Ecosystem

In an interview, Shri Pawan Goenka, founding chairperson of IN-SPACe, highlighted how India is transitioning from a government-led space program to a vibrant private sector ecosystem. he emphasized that startups thrive on freedom and failure tolerance—critical for innovation in space technology. IN-SPACe, itself a startup, has introduced a 10-year, $44 billion vision and a ₹1,000 crore venture capital fund to catalyze private participation. He highlighted the importance of quality over cost advantage, global competitiveness, and creating demand for space-based applications across sectors like agriculture, mining, and aviation. His approach blends governance discipline with entrepreneurial agility to position India as a global space leader.

How Indian States Are Powering Country’s Startup Growth

India’s startup momentum is increasingly being driven by state-level policies, funding support, and innovation hubs, making states key architects of entrepreneurial growth. The DPIIT’s States’ Startup Ranking Framework (SRF) benchmarks states on policy strength, infrastructure, funding access, market linkages, and institutional support. Karnataka and Maharashtra continue to lead, powered by deep talent pools, strong capital access, and high unicorn creation. Tamil Nadu, Telangana, and Delhi NCR–Haryana are strengthening positions through manufacturing tech, deeptech, fintech, and global integration. Gujarat and Uttar Pradesh have emerged as fast climbers, driven by inclusive policies and expansion into Tier-2 and Tier-3 cities. Emerging regions like Rajasthan, Kerala, and parts of Eastern India show that targeted incubation and policy action can unlock new ecosystems. Overall, adaptive policies, talent density, infrastructure, and access to capital remain the defining factors shaping India’s state-wise startup success.

How Tier-2 & 3 Cities Are Powering India’s Startup Boom in 2025

India’s startup growth in 2025 is being increasingly powered by tier-2 and tier-3 cities, which now account for nearly 50% of recognised startups, signalling a structural shift beyond metro dominance. Cities like Pune, Jaipur, and Ahmedabad have emerged as strong AI, SaaS, and deeptech hubs, backed by mature talent pools, manufacturing linkages, and steady VC inflows. Coimbatore and Kochi are leveraging their engineering and GCC ecosystems to build capital- efficient startups in industrial AI, automation, and applied technology. In North and Central India, Lucknow and Indore are gaining momentum through state-led startup programmes, academic incubation, and student entrepreneurship. Chandigarh is fast evolving into a quality-driven SaaS and AI services hub, supported by strong infrastructure and talent access. Across these cities, lower operating costs, policy support, and distributed talent are enabling startups to scale sustainably. Together, these eight non-metro hubs are reshaping India’s innovation map and setting the stage for the country’s next startup wave.

Tier-2 Startups Secure Grants and Investments at Salem Conclave

At the ‘Think Salem 2025’ startup conclave, 17 startups from Tier-2 cities showcased innovation and received significant support. Twelve startups incubated at the DST-supported Sona Inclusive Technology Business Incubator (i-TBI) signed grant agreements worth ₹50 lakh under the DST–NIDHI initiative, while five others secured ₹60 lakh from the Startup India Seed Fund managed by Sona Incubation Foundation. These ventures span healthcare devices, sustainability, drones, food innovation, and deep-tech solutions. Notable startups include NervePro, developing affordable nerve-monitoring systems, and DroneTribes, creating indigenous drones for agriculture and security. This marks a strong push for regional innovation and investment beyond metro hubs.

Ecosystem Development and Institutional Support

The Foundery Launches 90-Day Residential Startup Programme: Nikhil Kamath and Kishore Biyani have introduced The Foundery, a unique 90-day residential programme designed to transform aspiring founders into co-creators of investible startups. Blending elements of a school, accelerator, and venture studio, the initiative emphasizes hands-on execution over classroom learning. Participants refine ideas, validate demand, build products, and test market fit while collaborating with seasoned operators, investors, and domain experts. Selected ventures can retain up to 25% equity and may receive seed funding of up to ₹4 crore. With mentors like Vijay Shekhar Sharma and Kunal Bahl, The Foundery aims to nurture entrepreneurial talent through immersive, structured support.

Panasonic Ignition 3.0 Champions Residential Tech Innovation in India

Panasonic Life Solutions India, in collaboration with Panasonic Corporation, announced Red Health and Respirer Living Sciences as winners of its third Ignition accelerator cohort. Focused on “Residential Business Challenges,” Ignition 3.0 attracted 113 applications and selected 11 startups for a three-month program featuring masterclasses, mentorship, and technology validation. Red Health offers integrated emergency response services, while Respirer Living Sciences develops IoT-enabled energy recovery ventilators for healthy indoor air. Winners will co-create scalable solutions with Panasonic, receive strategic support, and explore global market opportunities. This initiative reinforces Panasonic’s commitment to shaping smarter, safer, and sustainable homes through collaborative innovation.

FICCI and Mercedes-Benz Launch Bharat Innovation Challenge

FICCI and Mercedes-Benz India have introduced the Bharat Innovation & Business Ideas Challenge Programme to nurture early-stage innovators and strengthen India’s startup ecosystem. The initiative targets priority sectors such as manufacturing, sustainability, decarbonisation, electric mobility, and education—key pillars of India’s development goals. Selected participants will receive expert mentorship, industry exposure, and opportunities to present at FICCI platforms. The top seven winners will gain innovation support of up to ₹30 lakh, along with year-long guidance and access to corporate networks. This collaboration underscores the growing role of industry-startup partnerships in driving scalable solutions for a resilient and globally competitive India.

Marwari Catalysts Launches Thrive 10.0 for DefenceTech and AgriTech Startups

Marwari Catalysts has introduced Thrive 10.0, its flagship program to support early and growth-stage startups in DefenceTech and AgriTech—two sectors vital to India’s future. The initiative offers mentorship, sector insights, and venture- building support, along with a corporate-linked pathway for industry access. With DefenceTech projected to reach $19 billion by 2030 and AgriTech $34 billion by 2027, Thrive 10.0 aligns with national priorities. Applications are open for founders building scalable solutions to strengthen India’s food security and defense capabilities.

Innovation and Product Spotlight

Sarla Aviation Begins Ground Testing of India’s First eVTOL Air Taxi

Bengaluru-based aerospace startup Sarla Aviation has commenced ground testing of its half-scale eVTOL demonstrator, SYLLA SYL-X1, marking a major milestone in India’s next-generation urban air mobility journey. With a 7.5-meter wingspan, SYL-X1 is the largest private eVTOL prototype under development in the country, designed with certification intent from the outset. The company plans to roll out full-scale electric air taxis by 2028, targeting helicopter-class endurance with reduced costs and enhanced safety through electric propulsion. Backed by $13 million in funding from Accel and prominent angel investors, Sarla Aviation aims to build a certified, India-designed aviation platform for sustainable urban transport.

Palnadu Startup Turns Paddy Waste into Eco-Friendly Tableware

Agriware, a women-led startup from Kakani village in Andhra Pradesh’s Palnadu district, is tackling plastic pollution by converting paddy waste into biodegradable tableware. Founded by Rayudu Rajya Lakshmi and Venkata Ramana, the venture produces plates, cups, and bowls using rice husk, bran, and straw. These products decompose within 90– 120 days and are safe for both land and water ecosystems, even serving as animal feed post-use. Backed by CSIR-supported technology and an investment of ₹3 crore, Agriware is witnessing strong domestic demand from cities like Hyderabad and Bengaluru. This innovation promotes sustainability, supports farmers, and offers a scalable alternative to single-use plastics.

Funding and Investment Trends

Nippon Life India AIF Launches Direct Venture Capital Fund for Startups

Nippon Life Group’s Indian alternative investment arm is launching its own venture capital fund aimed at making direct equity investments in startups, marking a strategic shift from its traditional approach of channeling capital through third-party VC funds. Ashish Chugani, head of alternative investments, revealed this move is intended to boost exposure to high-performing ventures and access upside potential more directly. The fund will complement existing offerings like the Nippon India Digital Innovation AIF, which already invests in early-to-growth stage tech startups via a multi-manager model. This marks a significant evolution in Nippon’s strategy, as it enters the startup ecosystem with a more proactive investment role.

Indian Startups Raise $95.5M Amid Funding Slowdown

Between December 22–27, 11 Indian startups collectively raised $95.54 million, marking a sharp 74% drop from the previous week’s $363.9 million. Growth- stage deals dominated with $73 million, led by CoreEL Technologies’ $30 million Series B round and Dugar Finance’s $18 million debt funding. PlasmaGen Biosciences and Wow! Momo also secured significant investments. Early-stage startups raised $22.5 million across five deals, with PowerUp Money leading at $12 million. Bengaluru topped city-wise deal count, while fintech and deeptech led sectoral activity. Additionally, Anicut Capital closed its ₹1,275 crore fund, and notable acquisitions included FirstCry’s buyout of K.A. Enterprises and Livspace acquiring Abby Lighting.

India startup funding hits $11B in 2025 as investors grow more selective

India’s startup ecosystem raised nearly $11 billion in 2025, but investors wrote far fewer checks and grew more selective about where they took risk, underscoring how the world’s third most-funded startup market is diverging from the AI-fueled capital concentration seen in the U.S. The selective approach was most evident in deal-making. The number of startup funding rounds fell by nearly 39% from a year earlier, to 1,518 deals, according to Tracxn. Total funding slipped more modestly — down just over 17% to $10.5 billion.

From Around the World and Strategic Partnerships

Japan’s Startup Ecosystem Gains Global Spotlight

Three years into its Startup Development Five-Year Plan, Japan is rapidly emerging as a global innovation hub. The initiative aims to grow 100,000 startups, nurture 100 unicorns, and attract ¥10 trillion in investments by 2027. Startup numbers have surged from 16,000 to 25,000, driven by university-led ventures and deep-tech innovations. Government-backed policies are unlocking dormant IP and fostering industry-academia collaboration. Global investors, including Alumni Ventures and Berkeley SkyDeck, are expanding into Japan, signaling confidence in its long-term strategy. Events like the Global Startup Expo 2025 have catalyzed over 1,000 investor-startup meetings, reinforcing Japan’s ambition to lead in science-driven entrepreneurship.

China Starts State-Backed Venture Funds to Support Tech Startups

China has officially launched a national venture capital fund and three large regional funds, together worth billions of dollars, as part of a push to foster home-grown tech champions and improve investment efficiency. The National Startup Investment Guidance Fund, as well as the three vehicles covering the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Greater Bay Area, began operating on Friday. The national fund is backed by 100 billion yuan from the Ministry of Finance, financed through the issuance of ultra-long special sovereign bonds.

Korea’s Startup Confidence Hits Record High in 2025

Korea’s startup ecosystem ended 2025 on a strong note, with the Venture Business Sentiment Index (BSI) reaching 95.3—the highest since its launch in 2024. The rebound was driven by improved domestic demand, better financing conditions, and rising investor activity, particularly in software, IT services, and telecom manufacturing. Early-stage funding and bridge investments surged in Q4, supported by government initiatives under the ‘Four Major Venture Powerhouse Strategy.’ While optimism extends into early 2026 with an outlook index of 100.8, challenges like raw material costs and global uncertainty remain. Sustaining this momentum will require swift policy execution and ecosystem resilience.