After the turbulence of 2023 and the cautious recovery of 2024, India’s startup ecosystem entered 2025 with tempered optimism. The year did not deliver a funding boom—but it did offer something arguably more important: stability, select growth, and visible signs of maturity.
Indian startups raised $13 billion in 2025, a 10% decline from the $14.4 billion raised in 2024. While the drop was driven largely by the absence of mega late-stage rounds, funding levels still remained comfortably above the $11.3 billion recorded in 2023, one of the harshest years for venture capital globally.
More tellingly, 2025 was not defined only by capital raised. The year saw record IPO activity, fewer layoffs compared to the previous two years, and sharper investor selectivity. At the same time, startup shutdowns rose to a three-year high, underscoring the ecosystem’s ongoing churn.
According to data compiled by TheKredible, startups raised capital across 1,250 deals during the year. Growth and late-stage rounds contributed $9.86 billion across 286 deals, while early-stage funding stood at $3.2 billion through 831 deals. Another 133 funding rounds remained undisclosed, reflecting continued opacity around smaller transactions.
A Year of Uneven Funding Flows
Funding momentum in 2025 was anything but linear. The year opened strong, with $1.76 billion raised in January, setting expectations for a robust start. However, deal activity softened soon after, with funding slipping below the $1 billion mark in seven different months.
The second half brought brief relief. September recorded $1.22 billion, followed by an October peak of $1.73 billion, supported by a rise in deal closures. But the rebound proved short-lived. December ended on a muted note, with $870 million raised, pointing to lingering investor caution even as valuations stabilised.
Growth-Stage Capital Finds Select Winners
Despite fewer large cheques overall, growth-stage funding remained concentrated in startups with clear scale, revenue visibility, and strong sector positioning.
Quick commerce player Zepto led the year with a $450 million raise, reaffirming investor belief in India’s rapid delivery story. Impetus Technologies followed with $350 million, while healthcare data platform Innovaccer raised $275 million, highlighting sustained interest in AI-led enterprise solutions.
Conversational AI firm Uniphore secured $260 million, and cross-border fintech Zolve raised $251 million. Logistics startup Porter closed a $200 million round, while PharmEasy continued its recovery journey with $193 million. SaaS company MoEngage raised $180 million, fintech firm Weaver Services raised $170 million, and Eruditus rounded off the top ten with a $150 million debt round.
Together, these deals illustrated how capital in 2025 gravitated toward proven business models rather than aggressive experimentation.
Early-Stage Funding: Focused, Not Frenzied
At the early stage, funding patterns reflected discipline rather than exuberance. Healthcare and AI emerged as dominant themes, with investors backing startups that combined innovation with scale potential.
PB Healthcare led early-stage rounds with a $218 million raise, followed by jewellery brand QWEEN, which secured $110 million, underscoring investor confidence in digitally native consumer brands.
AI startups made a strong showing. Giga, Composio, and Mem0 together raised over $110 million, while deeptech startup QpiAI also attracted notable backing. Fintech and SaaS funding remained selective, with startups like Saarthi Finance and Atomicwork raising mid-sized rounds.
The message was clear: early-stage capital was available—but only for startups with sharp focus and defensible differentiation.
M&A Activity: Strategic Consolidation Takes Centre Stage
Mergers and acquisitions in 2025 were driven by strategic consolidation across consumer, SaaS, logistics, and fintech sectors.
The year’s largest deal came from HUL, which acquired skincare brand Minimalist for $350 million. This was followed by Everstone’s $200 million acquisition of Wingify and Delhivery’s $166 million buyout of Ecom Express, reinforcing logistics consolidation.
Gaming and edtech also featured prominently, with deals involving Head Digital Works and TAL Education. Fintech consolidation continued through transactions by InCred Money, Razorpay, Nazara, and Findi, reflecting steady interest in building integrated financial platforms.
ESOP Liquidity Remains Limited
Employee liquidity opportunities stayed muted in 2025. Flipkart’s $50 million ESOP payout was the standout transaction, while most other buybacks—including those by Darwinbox, Dhan, Dezerv, and InsuranceDekho—remained below the $10 million mark.
Compared to $190 million in ESOP buybacks in 2024 and $802 million in 2023, liquidity for employees remained constrained. Notably, 2025 figures exclude IPO-led liquidity, which played a significant role for listed startups.
Bengaluru Tightens Its Grip as Startup Capital
Geographically, Bengaluru further strengthened its position as India’s startup capital, accounting for 477 deals and $6.03 billion, or 46.14% of total funding, up from 35% the previous year.
Delhi-NCR followed with 301 deals worth $2.57 billion, while Mumbai closed 182 deals totalling $2.26 billion. Among emerging hubs, Pune, Chennai, Hyderabad, Indore, and Ahmedabad showed growing traction, signalling broader regional participation.
Fintech Leads, AI and Healthtech Follow Closely
Sector-wise, fintech emerged as the largest funding recipient, raising $2.89 billion across 154 deals, accounting for 22% of total capital deployed. E-commerce followed with $1.88 billion, while AI startups raised $1.31 billion across 113 deals.
Healthtech remained resilient with $1.27 billion across 100 deals, while foodtech saw moderated interest, raising $386 million across 73 deals, reflecting cautious sentiment in the segment.
Layoffs Fall, but Shutdowns Rise
Workforce rationalisation continued, though at a slower pace. In total, 24 startups laid off around 3,700 employees in 2025, compared to 4,700 in 2024 and a staggering 24,000 in 2023. Layoffs were concentrated in consumer internet, gaming, and AI-first startups.
However, startup shutdowns rose to 28, up from 17 in 2024. Notable closures included BluSmart, Dunzo, The Good Glamm Group, Hike, and agritech startup Otipy, highlighting the difficulty of sustaining scale in capital-intensive models.
IPOs: The Defining Story of 2025
Perhaps the most defining trend of the year was the surge in startup IPOs. The number of tech startup listings jumped from 13 in 2024 to 28 in 2025, with companies raising nearly ₹41,000 crore through public markets.
Listings by Urban Company, Meesho, Groww, Lenskart, and Ather Energy not only created exits for early investors but also reinforced India’s capital markets as a viable path for new-age companies—even as foreign investors remained net sellers for much of the year.
Looking Ahead: Cautious Optimism for 2026
While 2025 fell short of expectations following the recovery hopes of 2024, it reinforced a deeper truth: India’s startup ecosystem is evolving. Venture funding remains under pressure, partly due to established conglomerates expanding into capital-heavy sectors like clean energy and data centres—areas traditionally dominated by venture-backed startups in global markets.
Yet, the strength of domestic liquidity, sustained IPO exits, and a new generation of post-2020 startups waiting in the wings offer reason for optimism. As volatility persists, the ecosystem appears better equipped, more disciplined, and quietly resilient.
If 2025 was a year of consolidation, 2026 may well be the year when the next breakout stories emerge.
