Tech startup funding falls 17% to $10.5bn this year

Chennai: India's technology startups' cumulative equity funding stood at $10.5 billion in 2025, a decline of 17% on a year-on-year basis and down 4% compared to the $11 billion raised in 2023, according to a report. This marks a reversal from 2024, when funding had shown a modest annual recovery following the 2021 peak and the subsequent funding winter.

According to Tracxn's Indian tech funding report, the decline was broad-based. While early-stage funding increased by 7%, seed funding dropped 30% and late-stage funding fell 26% year-on-year. There were 14 funding rounds above $100 million, compared to 19 such rounds in 2024 and 16 in 2023.


A total of 136 acquisitions were recorded in the tech sector, a 7% increase compared to 127 in 2024, though an 11% decline from 153 acquisitions in 2023. Meanwhile, tech sector IPOs increased 17% to 42, from 36 exits in 2024 and marking a 62% rise compared to 26 IPOs in 2023. Major IPOs during the year included Meesho, Aequs, and Ravel. Five unicorns were created in 2025, the same as in 2024.

Neha Singh, co-founder of Tracxn, said capital deployment has become more disciplined. "The sustained momentum in early-stage funding, rising IPO activity, and steady unicorn creation highlight a maturing ecosystem that is increasingly focused on building scalable, high-quality businesses. The growth in exits and continued investor interest across core sectors such as enterprise applications, retail, and fintech show a resilient startup market."

The report highlights enterprise applications, retail, and fintech as the top-performing sectors, though these segments witnessed double-digit declines in funding. Enterprise applications received $2.6 billion in funding, a 17% decline compared to 2024, while retail secured $2.4 billion, also a 17% drop. Fintech raised $2.2 billion, a 5% year-on-year decline.

Large deals were driven primarily by the transportation and logistics tech, environment tech, and auto tech sectors, with notable rounds including Erisha E Mobility's $1 billion Series D, Zepto's $300 million Series H, and GreenLine's $275 million round.