India's startup ecosystem is witnessing a dramatic redistribution of venture capital, with traditional leader Karnataka experiencing a sharp decline while Delhi-NCR and Maharashtra show steady growth during the first nine months of 2025.
Funding Figures Tell a Shifting Story
According to the latest Tracxn geo funding trend report, Karnataka-based tech companies raised only $2.7 billion in equity funding between January and September 2025. This represents a massive 40% decline from the $4.5 billion recorded during the same period in 2024, and is also 23% lower than the $3.5 billion raised in the first nine months of 2023.
Meanwhile, Delhi-NCR startups demonstrated remarkable resilience, attracting $2.4 billion in funding - a 12% increase from the $2.1 billion raised in 2024 and a substantial 34% jump compared to the $1.8 billion secured two years earlier.
Maharashtra maintained its upward trajectory with companies raising $2 billion, marking an 11% year-over-year growth, though this still falls short of the $2.3 billion total achieved in the same period of 2023.
Stage-Wise Funding Patterns Reveal Deeper Trends
The three major tech hubs displayed distinctly different funding patterns when analyzed by investment stage. Delhi-NCR's impressive performance was primarily driven by late-stage deals surging to $1.6 billion - a remarkable 77% increase from $920 million in 2024 and a massive 121% jump from $737 million in 2023.
However, this late-stage boom came at the expense of early-stage investments. Seed capital in Delhi-NCR halved to $174 million, while early-stage funding declined by 26% to $644 million, indicating a potential gap in the pipeline for future unicorns.
Implications for India's Startup Landscape
This funding redistribution signals a significant rebalancing of India's technology ecosystem. For years, Karnataka, particularly Bengaluru, has dominated the startup narrative as India's unquestioned startup capital. The current trends suggest a more diversified and mature ecosystem emerging across the country.
The concentration of late-stage funding in Delhi-NCR indicates that the region is producing more companies reaching maturity and scale, while Karnataka's decline might reflect market correction after years of hyper-growth. Maharashtra's steady performance demonstrates the resilience of Mumbai and Pune's tech ecosystems despite global economic headwinds.
This geographical rebalancing could lead to healthier competition among India's startup hubs, potentially benefiting entrepreneurs across the country through better infrastructure development, talent distribution, and investor attention beyond traditional centers.
