Indian Startup Funding Falls 8% YoY to $11 Bn in 2025

Funding activity in India’s startup ecosystem softened in 2025, with total capital raised declining to nearly $11 billion. This marked an around 8% drop from the $12 billion mobilised in 2024, as per Inc42’s Annual Indian Startup Trends Report, 2025. 

Late-Stage Deals Dominate, Growth Capital Shows Uptick  

The year had over 936 funding deals, which is less than the 993 transactions seen the year before. This shows a slowdown in private capital inflows. Meanwhile, startups looked for other ways to raise money. 18 companies went public during the year.  

Late-stage funding made up the largest portion, with startups raising nearly $6 billion. However, this amount was lower than last year’s figures. Growth-stage funding was a positive aspect, rising over 14% year-on-year to around $4 billion. Seed-stage investments stayed relatively low, bringing in about $793 million in 2025. 

Fintech, Enterprise Tech Lead Sectoral Funding  

From a sectoral perspective, fintech, enterprise technology and ecommerce remained the primary recipients of investor capital. Newer themes such as artificial intelligence, deeptech, climate technology and real estate technology also attracted funding interest, albeit at smaller scales than the leading sectors. 

Funding Levels Above 2023, Well Below Peak Years  

Despite the year-on-year decline, overall funding in 2025 stayed above the $10 billion raised in 2023. However, it remained well below the highs of earlier years, particularly 2021 and 2022, when startup funding peaked at $42 billion and $25 billion, respectively. 

Public market activity also influenced the funding landscape. The IPOs completed during the year increased the amount of capital available to startups and showed a gradual change in funding routes. 

Bengaluru Leads as Key Startup Funding Hub  

Regionally, Bengaluru, Mumbai, and Delhi NCR continued to lead in startup investment. Bengaluru was the top city for capital raised. Overall, 2025 was a time for the ecosystem to adjust. Private funding was limited. Meanwhile, public markets played a larger role.