Indian startup funding drops 10% to $13 Bn in 2025, but IPO count hits record 18

Indian startups raised $13 billion in 2025, about 10% lower than the $14.4 billion secured in 2024, with fewer large funding rounds compared to the previous year weighing on overall capital flows. Even so, funding stayed ahead of the $11.3 billion recorded in 2023, one of the toughest phases for the ecosystem. The year delivered stronger outcomes on select metrics, including a rise in startup IPOs and a reduction in layoffs. However, startup shutdowns climbed to a three-year high.

According to data compiled by TheKredible, Indian startups raised a total of $13 billion across 1,250 deals in 2025. Growth and late-stage funding accounted for $9.86 billion from 286 deals, while early-stage funding contributed $3.2 billion through 831 deals. Additionally, 133 rounds of funding remained undisclosed. 

M-o-M trend

In 2025, Indian startup funding followed an uneven pattern, with a strong start at $1.76 billion in January before dropping below $1 billion in seven months over the course of the year. Funding recovered in September at $1.22 billion and reached another high in October at $1.73 billion, supported by higher deal activity. The year closed at $870 million in December, which reflected a softer finish after brief rebounds in the second half.

Top 10 growth-stage deals in 2025

In 2025, major growth-stage rounds were distributed across consumer, enterprise, and tech-focused segments. Zepto led the list with a $450 million raise, followed by Impetus Technologies at $350 million and Innovaccer at $275 million, which highlighted continued investor interest in AI-led platforms. Uniphore and Zolve raised $260 million and $251 million, while logistics firm Porter secured $200 million. Healthtech remained active, with PharmEasy raising $193 million, and SaaS company MoEngage closing a $180 million round. Fintech player Weaver Services raised $170 million, and edtech major Eruditus completed the top ten with a $150 million debt round.

Top 10 early-stage deals in 2025

Early-stage funding in 2025 showed strong concentration in healthtech and AI-led startups. PB Healthcare led with a $218 million raise, followed by consumer-focused jewellery brand QWEEN at $110 million, which signaled continued investor confidence in scalable healthcare and digital commerce models. AI startups featured prominently,  with Giga, Composio, and Mem0 together raising over $110 million, while deeptech player QpiAI also drew notable interest. Fintech and SaaS rounds remained selective, with Saarthi Finance and Atomicwork securing mid-sized raises, a pattern that reflected a cautious but targeted approach to early-stage capital allocation during the year.

Mergers and Acquisitions

M&A activity in 2025 was led by consumer, SaaS, and logistics-focused transactions. HUL’s $350 million acquisition of Minimalist emerged as the largest deal of the year, followed by Everstone’s $200 million purchase of Wingify and Delhivery’s $166 million acquisition of Ecom Express. Gaming and edtech featured among the top transactions, as Head Digital Works and TAL Education completed mid-sized deals. Fintech also saw steady consolidation through transactions by InCred Money, Razorpay, Nazara, and Findi.

ESOP buyback/liquidity/payout

ESOP buyback activity in 2025 remained selective, led by Flipkart’s $50 million payout, while most other companies executed smaller programmes below $10 million. Buybacks at firms such as Darwinbox, Dhan, Dezerv, and InsuranceDekho reflected limited but targeted liquidity for employees, largely concentrated among mature startups. In comparison, total ESOP buyback, payout, and liquidity in 2024 stood at around $190 million, far lower than $802 million in 2023, $440 million in 2021, and $200 million in 2022. The 2025 figure, however, excludes IPO-driven liquidity.

City and segment-wise deals

Bengaluru retained its lead in 2025, with 477 deals and $6.03 billion in funding, raising its share to 46.14% from 35.08% in the previous year. Delhi-NCR ranked second with 301 deals and $2.57 billion, followed by Mumbai, which recorded 182 deals and $2.26 billion. Among the other major hubs, Pune saw 51 deals worth $409.43 million, while Chennai closed the list with 53 deals and $281.91 million. On the funding front, cities such as Hyderabad, Indore, and Ahmedabad also posted strong performances during the year.

Fintech emerged as the largest sector by funding in 2025, with $2.89 billion raised across 154 deals, which made up 22.08% of the total capital deployed during the year. E-commerce followed with 176 deals and $1.88 billion. AI attracted $1.31 billion across 113 deals, while healthtech closed 100 deals worth $1.27 billion. Foodtech saw lower capital inflows, with $386.15 million raised across 73 deals, as investor interest remained selective in the segment.

Series wise deals

Early-stage activity dominated deal volume in 2025, as pre-seed and seed rounds together accounted for 552 deals, though the capital raised at these stages remained limited. Seed rounds alone closed 409 deals and attracted $994 million. Series A funding strengthened during the year, recording 219 deals and $1.97 billion in capital, while Series B led by value at $2.37 billion across 99 deals. Debt funding also remained relevant, as $984.36 million was raised through 52 transactions.

Layoffs, shutdowns and departures

Layoffs in 2025 were largely concentrated in consumer internet, gaming, and AI-led startups, as companies focused on cost discipline amid uneven revenue growth. Significant workforce reductions were reported at Ola Electric, Zomato, Head Digital Works, VerSe, Zepto, and Junglee Games, each impacting several hundred employees. Overall, 24 companies laid off around 3,800 employees during the year. In comparison, layoffs affected about 4,700 employees in 2024, 24,000 in 2023, and 20,000 in 2022.

Startup shutdowns in 2025 included several high-profile names across consumer and mobility segments. Mobility player BluSmart shut operations in April, while Dunzo, once a key quick commerce platform, exited earlier in January. Consumer and content-led ventures also saw closures, including The Good Glamm Group in e-commerce and Hike in social messaging. In agritech, Otipy shut down after struggling to sustain scale. In total, 28 startups shut operations in 2025, a sharp rise compared to 17 shutdowns in 2024 and 15 in 2023.

Comparison H1 Vs H2

In 2025, Indian startups raised $6.72 billion in H1 and $6.34 billion in H2 across 626 and 624 deals, respectively. The number of $100 million-plus rounds eased from 12 in H1 to 10 in H2. M&A activity declined sharply from 85 transactions in H1 to 47 in H2, while layoffs rose from 1,000-plus employees across eight startups in H1 to 2,800-plus employees across 14 startups in H2.

Trends in 2025

Surge in startup IPOs: The number of tech startup IPOs rose from 13 in 2024 to 18 in 2025, a sharp acceleration in public market activity for new-age companies in India. During the year, consumer internet, fintech, SaaS, and EV startups together raised around Rs 41,000 crore through public listings. Prominent IPOs by Urban Company, Meesho, Groww, Lenskart, and Ather Energy also created substantial liquidity and exit opportunities for early investors.

Drop in ESOP buybacks/ liquidity:ESOP buyback and payout value stood at nearly $65 million in 2025, down from around $190 million in 2024, $802 million in 2023, $200 million in 2022, and $440 million in 2021. The data shows a continued contraction in ESOP-led liquidity, even as employee exits increasingly shifted toward IPO-driven outcomes rather than private buyback programmes.

Wealthtech funding momentum builds: India’s wealthtech startup ecosystem has seen strong consumer and investor interest since 2024, raising over $630 million in the past couple of years. Funding reached $369.34 million in 2025, led by startups such as Neo, Smallcase, Dezerv, and Syfe, which accounted for a large share of the capital raised during the period.

RBI eases fintech payment licence approvals: The Reserve Bank of India has accelerated regulatory approvals for fintech companies, issuing multiple payment-related licences to a broader set of firms. In 2025, several players secured full-stack authorisation across categories, with around half a dozen companies, including Paytm, Razorpay, Easebuzz, PayU, Pine Labs, and Airpay, receiving approvals for online, offline, and cross-border payment aggregation.

Conclusion: 

While an improvement in 2024 was a given coming off the cold winter that was 2023, we confess that 2025  has been underwhelming for us as well. Many reasons can be attributed, but one that is worth considering is the expansion of established conglomerates in India into newer fields, crowding out startups, and venture funding in those spaces. From data centres to clean energy, many such segments continue to lack in genuine start ups that would be backed by VC funding. The rush of IPO’s in the solar space, backed by established groups is just one example of how VCs have allowed this one to pass. It remains to be seen how other related segments like energy storage which have raised billions in the US for instance, fare here.

 Beyond that, the broader IPO exits delivered by startups continue to  mark out India as a viable market vis a vis many peers. That the markets have sustained on domestic sourced liquidity is an even stronger signal of the inherent strength of the markets here, even as foreign investors sold for most of the year. Storied names from India’s startup story have been acquired or listed, leaving us waiting for the next,  younger post 2015 cohort of startups that are likely to rise further. Or the firms in the post-2020 generation that will hopefully lead fund raises to scale faster and further. All in all, in a volatile environment unlike what we saw at the beginning of the year, we are still optimistic that 2026 will mark a return to a stronger funding environment and some breakout stories.