ETtechDespite a pickup in growth-stage funding, Indian startup funding remained largely flat in 2025 as fewer large deals and evolving venture capital thesis on early-stage AI investments weighed on overall numbers. Startups raised $9.8 billion this year till December 15, marginally lower than the $10.1 billion raised in the whole of 2024, according to data sourced from Venture Intelligence data.
Venture capital investors, however, stayed active during the year, assessing early-stage opportunities as exit activity gathered pace amid a buoyant IPO market.
“There were two things happening this year. New investments as well as exits. After a couple of years where the pace had declined, thanks to all things AI in particular along with consumer brands, it’s been quite a hectic year,” said Mohit Bhatnagar, managing director at Peak XV Partners. The investment firm participated in multiple growth-stage rounds this year, including a $50 million round for spacetech startup Digantara, $65 million in telehealth platform Truemeds, $40 million in fintech startup Scapia as well as AppsForBharat’s $20 million round.
In terms of larger rounds, quick commerce company Zepto closed a $450 million in a mix of primary and secondary transactions, while urban mobility startup Rapido this year closed a part of its larger $550 million transaction. Similarly, ecommerce firm Meesho and wealthtech Groww closed funding of $270 million and $200 million, respectively, for their pre-IPO rounds.
In November, enterprise software startup MoEngage also closed a $280 million round comprising both primary and secondary transactions. In a secondary transaction, an incoming investor buys shares from existing shareholders or employees.ETtech
“For companies like ours, fundraising depends a lot on the stage and the kind of investors you are raising from,” Raviteja Dodda, cofounder and chief executive of MoEngage told ET. As a growth to late-stage company nearing the billion-dollar valuation mark, investors are increasingly focused on clarity around liquidity, he said.
“At that scale, the liquidity path has to be very clear, typically an IPO. You can’t plan an M&A exit at that level,” Dodda said, adding that the strong performance of Indian startup public listings this year has served as an important validation. “With everything that’s happening in the Indian equity markets, it is a big validation for how companies at scale can go public when you have strong growth and also profitability.”
Once that validation exists, fundraising conversations shift to pricing rather than availability of capital, Dodda said, pointing to visible liquidity and ample dry powder among investors amid the ongoing IPO wave. “There is definitely interest for good, high quality companies.”
Nearly a dozen new-age companies went public this year, including Meesho, Lenskart, Groww, PhysicsWallah, Pine Labs, Capillary Technologies, Ather Energy, Bluestone and Urban Company – resulting in liquidity for early investors.
Early stage trends
The early stage, which includes seed and Series A rounds, saw funding of $3.1 billion in 2025, marginally down from $3.5 billion in 2024. This is in sharp contrast with a market like the US where startups building in the AI space are raising billions of dollars in seed money.
In India, investors backed artificial intelligence startups across enterprise use cases and those targeting developers. Leading investors such as Accel, Lightspeed, Elevation Capital, and WestBridge Capital backed startups focused on AI-led software integration, DevOps automation, and large-scale adoption platforms.
Rahul Chowdhri, partner, Stellaris Venture Partners which invested in companies like insuretech startup Pibit.ai, AI entertainment startup Dashverse, and fintech startup Goodscore, said that nearly half of its deal flow this year was AI-native.
“AI will remain a central theme for us, but the opportunity is evolving in more focused and differentiated ways…one specific area of interest for us is voice AI. It is emerging as a distinct and rapidly accelerating theme. Given India’s voice-first behavior and recent technological advances, voice AI is expected to scale significantly across customer support, sales, marketing, recruiting and logistics,” Chowdhri said.
As per Venture Intelligence startups in the AI and machine learning across enterprise and consumer segments this year, with funding rising from $782 million in 2024 to $1.3 billion, even as concerns about a potential global bubble persisted.
“Bubbles are bad for those companies that were on shifty sands. But there’s no way a bubble removes the positive impact of what AI can cause in so many different industries. So I think we are long on AI. And bubbles or no bubbles, I think you will see that to be a fairly large investment area for us in the coming decade,” said Peak XV’s Bhatnagar.
This year Bessemer Venture Partners invested in companies like Protectt, banking infrastructure startup Transbnk, Pluro, Easebuzz, All Home Bharat Platform, Moxie, short form learning startup Seekho, and Graph AI.
“This has been an active year for us. We also followed up with significant participation in many of our companies. A few clear themes that emerged this year were direct-to-consumer (D2C) Brands, AI services and consumer AI. We’ve seen a rapid shift from experimentation to deployment, with AI transforming business and consumer behaviour,” said Anant Vidur Puri, partner, Bessemer Venture Partners.
Late stage loses the steam
Late stage funding, including Series E and Series F rounds, dropped sharply to $1.8 billion in 2025 from $2.9 billion last year, with strong IPO activity squeezing private market deals, the data showed.
ET earlier reported that India’s late-stage startup funding slipped in 2025 compared to last year as a busy IPO calendar squeezed private market transactions for companies. Firms like Lenskart, Groww, PhysicsWallah and Ather Energy made their stock market debuts, making 2025 one of the most active IPO years for the Indian startup ecosystem since the 2021-22 boom.
“Recent IPOs have created a new generation of experienced operators-turned-founders, bringing deep execution muscle into the startup ecosystem. As this high-quality pool of entrepreneurs enter the market, we expect early-stage investing momentum to accelerate,” Chowdhri added.
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