India’s tech startup ecosystem has seen a notable contraction in funding for the first nine months of 2025, dropping 23% year-on-year to $7.7 billion, according to the latest India Tech Funding 9M 2025 report by Tracxn. Despite this decline from $10.1 billion during the same period in 2024, India continues to hold its position as the third-most funded startup market globally, trailing only the United States and United Kingdom, and ahead of Germany and France.
Seed and Late-Stage Segments Take the Biggest Hit
Funding across all stages saw a downward trend. Seed-stage investments dropped sharply to $727 million, a 39% fall from last year’s $1.2 billion. Late-stage deals contracted by 27% to $4.3 billion, while early-stage rounds remained relatively stable at $2.7 billion, down just 10%.
The report also notes a decline in mega-rounds. There were 10 funding rounds above $100 million in 2025 so far, compared to 16 in 2024. Notable deals included Erisha E Mobility’s $1B Series D, GreenLine’s $275M Series A, and Infra.Market’s $222M Series F.
Enterprise, Retail, and Logistics Dominate Investor Focus
Enterprise Applications emerged as the top-funded sector, attracting $2.3 billion, followed by Retail Tech ($2B) and Transportation & Logistics Tech ($1.79B). Despite sectoral drops, all three remained strongholds for investor confidence. The median deal size doubled to $1.5 million, indicating investor preference for more mature, capital-efficient startups.
In terms of geography, Bengaluru accounted for 31% of total funding, followed by Delhi (18%), Mumbai (exact figure not disclosed), and Gurugram.
Exit Activity, IPOs Signal Market Stabilization
The Indian startup ecosystem saw 110 acquisitions between January and September 2025, up from 96 in the same period last year. IPO activity remained strong, with 26 companies going public, including DevX, Urban, BlueStone, and iCodex. Enterprise Applications and Real Estate Tech each saw six IPOs.
On the unicorn front, four new unicorns were created in 9M 2025, taking India’s total to 122 unicorns, of which 22 have exited through IPOs or M&As. Bengaluru remains the leading unicorn hub with 53, followed by Gurugram (20) and Mumbai (18).
Despite Correction, India Remains a Top Startup Market
Commenting on the findings, Neha Singh, Co-Founder of Tracxn, noted, “India’s climb to the third rank globally underscores the resilience and adaptability of its startup ecosystem.” She added that balanced exits, rising acquisitions, and sustained unicorn creation are signs of a maturing market.
While investor caution continues amid global macroeconomic uncertainty, sectors such as enterprise tech, cloud solutions, and clean energy continue to attract long-term capital. Notably, Zerodha was highlighted for its profitability — earning $1.2B in revenue and $663M in profit in FY24.
