India Tech Funding Slips 17% in 2025, Early-Stage Deals Defy the Slowdown

Indian tech startups raised $10.5 billion in 2025, marking a 17% decline from $12.7 billion in 2024 and a 4% drop compared to 2023, as investors remained cautious amid a tougher global funding climate.

Despite the slowdown, India retained its position as the world’s third-largest tech funding ecosystem, behind only the US and the UK, according to Tracxn.

The funding picture was uneven across stages. Seed-stage investments fell sharply to $1.1 billion, down 30% year-on-year, reflecting tighter risk appetite for very early bets.

In contrast, early-stage funding showed resilience, rising 7% to $3.9 billion, signaling continued confidence in startups with proven traction and scalable business models. Late-stage funding bore the brunt of the correction, slipping 26% to $5.5 billion as large cheques became harder to come by.

"While capital deployment has become more disciplined, the sustained momentum in early-stage funding, rising IPO activity, and steady unicorn creation highlight a maturing ecosystem that is increasingly focused on building scalable, high-quality businesses," Neha Singh, Co-Founder of Tracxn, said.

Large funding rounds were fewer, with 14 deals crossing the $100 million mark, compared to 19 in 2024. Transportation and logistics tech, environment tech, and auto tech drove the biggest raises, led by Erisha E Mobility’s $1 billion round and Zepto’s $300 million funding.

Sector-wise, enterprise applications, retail, and fintech remained the biggest funding magnets, though all three saw modest year-on-year declines. Enterprise applications raised $2.6 billion, retail attracted $2.4 billion, and fintech secured $2.2 billion.

Bengaluru continued to dominate, accounting for nearly a third of total funding, followed by Mumbai.

While overall capital deployment slowed, the data suggests India’s startup ecosystem is maturing, with investors prioritising quality, scalability, and clearer paths to growth over aggressive expansion.