India claimed the spot as the world’s third-highest funded market for technology startups in 2025, despite a marked downturn in investment volumes compared with the prior year.
According to data compiled by market intelligence firm Tracxn, Indian tech startups raised $4.8 billion in the first half of 2025, down 25 percent from $6.4 billion raised in the same period in 2024.
This figure also fell short of $5.9 billion recorded in the second half of 2024. India leapfrogged nations such as Germany and Israel to climb from the fourth to the third position globally.
The Tracxn report notes that the dip in funding was broad-based across stages. Seed funding plunged 44 percent to $452 million, early-stage rounds declined by 16 percent to $1.6 billion, and late-stage investments contracted by 27 percent to $2.7 billion.
Despite the slowdown, five startups secured funding rounds exceeding $100 million, led by electric mobility firm Erisha E Mobility’s $1 billion raise, followed by GreenLine’s $275 million and Infra.Market’s $222 million.
Other recipients included Spinny and Darwinbox.
Sectoral trends reveal that some domains bucked the overall decline. Transportation and logistics technology stood out, with investment rising by 104 percent from the previous half to nearly $1.6 billion, making it one of the fastest growing areas of investor interest. Meanwhile, the retail tech segment drew $1.2 billion even as its year-on-year performance weakened, and enterprise applications secured $1.1 billion.
The funding climate also reflected greater exit activity. The first half of 2025 saw 73 acquisitions, compared with 54 in the same period in 2024. Among the most significant deals were the $516 million acquisition of Magma General Insurance by the DS Group and Patanjali, and Hindustan Unilever’s purchase of skincare brand Minimalist for $350 million. These exit moves are being viewed as evidence of maturation in India’s startup ecosystem.
Geographically, Bengaluru led the funding tally, accounting for 26 percent of total capital, followed closely by Delhi at 25 percent. In terms of investor participation, Accel, AngelList, and SoftBank Vision Fund emerged as among the most active across funding stages. At the seed level, Venture Catalysts, 100X.VC, and Antler were prominent, while early-stage rounds were led by Peak XV Partners, Accel, and Lightspeed. Late-stage investment saw strong participation from Sofina and Premji Invest.
Some observers see the drop in funding levels as a signal of tighter investor sentiment globally, but note that India’s ascension in rankings underscores resilience in the domestic tech ecosystem. Tracxn cofounder Neha Singh commented that while volumes have declined, meaningful exits and growing unicorn creation reflect greater stability and growth potential.
Beyond the numbers, the rise to third place is notable for its symbolic value. India’s tech founders, venture capital networks, and government policies supporting startups have been working to build a more mature, investable ecosystem. The classification brings heightened global attention, even as challenges such as capital access, profitability pressures, and infrastructure constraints remain.
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