India has emerged as the third-largest recipient of tech startup funding globally in the first half of 2025, raising $4.8 billion—surpassing Germany and Israel—even amid a 25% year-on-year decline.
Funding Slowdown Across Stages
While the overall funding dipped from $6.4 billion in H1 2024, the decrease wasn’t isolated:
- Seed funding dropped 44%, to $452 million.
- Early-stage rounds fell 16%, totaling $1.6 billion.
- Late-stage investment also declined by 27%, reaching $2.7 billion.
Despite the dip, five startups secured mega-rounds of over $100 million—led by Erisha E Mobility’s $1 billion raise—indicating continued investor confidence in large-scale ventures.
Sector-Wise Momentum
Key sectors leading the charge included:
- Transportation & logistics: $1.6 billion, a 104% jump from H2 2024.
- Retail tech: $1.2 billion—up 25% sequentially.
- Enterprise applications: $1.1 billion amid slowing overall funding.
These sectors now account for more than half of total capital inflows during the period .
City & Investor Landscape
- Bengaluru led funding at 26%, followed by Delhi at 25%.
- Active startups drew support from Accel, AngelList, SoftBank, with Venture Catalysts dominating seed-stage investment.
What This Means for India
| Highlight | Implication |
|---|---|
| Global ranking rise | Signals ecosystem maturity and global investor credibility. |
| Big deals hold steady | Five $100M+ rounds point to strategic, scalable startups. |
| Sector concentration | Transportation, retail, and enterprise tech lead innovation waves. |
| Geographic reach | Metro clusters still reign—regional growth next frontier. |
Neha Singh, co-founder of Tracxn, observed: “The funding volumes have come down… but India’s tech ecosystem continues to show resilience and maturity.”
What to Watch in H2
- Will India continue to attract mega-rounds in deep-tech and SaaS?
- Can Tier-II/III cities share more of the capital pie as regional ecosystems mature?
- Will M&A and IPO activity pick up, helping monetize investor returns?
India’s startup ecosystem retains global relevance—even in tighter markets. As funding flows focus on sustainability and scale, the next wave of unicorns and exits may define the long-term trajectory.
