The year 2025 marked a shift in the funding landscape for India's technology startups, with total equity investment witnessing a significant contraction. According to the latest data from market intelligence platform Tracxn, cumulative equity funding for the sector stood at $10.5 billion. This figure represents a 17% decline compared to the previous year, 2024, and is also 4% lower than the $11 billion raised in 2023.
A Broad-Based Funding Slowdown
The report indicates that the downturn was widespread across most investment stages. While there was a silver lining with early-stage funding increasing by 7%, the broader picture showed challenges. Seed funding plummeted by 30% year-on-year, and late-stage funding saw a sharp 26% drop. The number of large-ticket funding rounds also decreased, with only 14 rounds above $100 million in 2025, compared to 19 in 2024 and 16 in 2023.
This trend reverses the modest recovery observed in 2024, following the post-2021 peak "funding winter." Neha Singh, co-founder of Tracxn, commented on this shift, stating that capital deployment has become more disciplined. She noted that the sustained momentum in early-stage funding, rising IPO activity, and steady unicorn creation highlight a maturing ecosystem increasingly focused on building scalable, high-quality businesses.
Rise in Exits Signals Maturing Market
Despite the funding dip, the exit environment showed notable strength, pointing to a resilient and evolving market. The tech sector recorded 136 acquisitions, a 7% increase from the 127 seen in 2024, though still below the 153 acquisitions in 2023. More strikingly, tech sector IPOs jumped 17% to 42 in 2025, up from 36 in 2024. This marks a substantial 62% increase compared to the 26 IPOs in 2023.
Major public listings during the year included well-known names like Meesho, Aequs, and Ravel. Furthermore, the startup ecosystem continued to produce new high-value companies, with five new unicorns created in 2025, matching the number from 2024.
Sectoral Performance and Major Deals
The Tracxn report identified enterprise applications, retail, and fintech as the top-performing sectors in terms of total capital attracted. However, even these segments were not immune to the overall slowdown, each witnessing double-digit percentage declines in funding.
- Enterprise applications secured $2.6 billion, down 17% from 2024.
- Retail startups raised $2.4 billion, also a 17% drop.
- Fintech funding stood at $2.2 billion, a 5% year-on-year decline.
The largest funding rounds of the year were driven by other sectors, including transportation & logistics tech, environment tech, and auto tech. Notable mega-deals included Erisha E Mobility's $1 billion Series D round, Zepto's $300 million Series H, and GreenLine's $275 million funding. Singh emphasized that the growth in exits and continued investor interest across these core sectors demonstrate a resilient startup market that is navigating the new normal of cautious capital with strategic growth.
