India Startup Funding Falls 25% in H1 2025, Ranks 3rd Globally: Tracxn

India’s startup funding fell 25% in H1 2025, totaling $4.8 billion, yet it moved from fourth to third place globally in funding rankings. Major sectors like transportation and retail saw investment, while mega-rounds decreased. 12 startups went public and acquisition activity increased. Bengaluru retained its top position among cities for startup funding.

In the latest round of updates from India’s booming tech scene, startup funding dipped significantly in the first half of 2025. According to Tracxn’s ‘India Tech Semi-Annual Funding Report H1 2025’, the ecosystem raised $4.8 billion, a stark 25% decrease from $6.4 billion in H1 2024, and a drop of 19% from $5.9 billion in H2 2024. It’s a notable decline, but interestingly enough, India still climbed up from fourth to third in global rankings, overtaking both Germany and Israel. The United States and the United Kingdom continue to lead the pack, holding the first and second spots respectively.

Neha Singh, the co-founder of Tracxn, highlighted some silver linings amidst the financial downturn, stating, “While the funding volumes have come down compared to the previous year, India’s tech ecosystem continues to show resilience and maturity.” She pointed to strong interest in sectors like transportation, retail, and enterprise technology, saying this indicates investor confidence in tackling large, structural challenges. Singh also noted noteworthy IPOs and significant acquisitions as signs that the startup ecosystem can still generate long-term value, even as funding slows.

Breaking down the funding stages, it’s clear that the drop wasn’t selective—every stage saw declines. Seed-stage startups managed to pull in $452 million, plunging 23% from H2 2024 and a staggering 44% from H1 2024’s $802 million haul. Early-stage investments topped $1.6 billion but fell 6% sequentially and 16% year-on-year. As for late-stage funding, it landed at $2.7 billion, down 25% from the last half of the year and dropping 27% from the same time last year.

In terms of hefty deals, only five Indian startups managed to close funding rounds exceeding $100 million in H1 2025, which is a decline from nine in H2 2024 and ten in H1 2024. The standout deal was Erisha E-Mobility, which pulled in a hefty $1 billion in a Series D round. Other significant players included GreenLine with $275 million in Series A funding and Infra.Market raising $222 million in its Series F round. Spinny and Darwinbox also made the list of those attracting notable capital, with all this money flowing heavily into sectors like transportation and logistics, retail, and tech for real estate.

Diving deeper into sector performance, Transportation and Logistics Tech triumphed as the leading sector in H1 2025, with a remarkable $1.6 billion raised, soaring 104% compared to H2 2024 and increasing 54% from H1 2024. Retail captured $1.2 billion, although that marks a decline of 32% from H1 2024, it still shows a 25% uptick from H2 2024. Enterprise Applications saw $1.1 billion, but this was a fall of 21% from the previous half and down 26% on a yearly basis.

On the IPO front, 12 startups made their market debuts in H1 2025, a low compared to 21 during the same stretch last year. Standouts included Ather Energy, Tankup, SS Innovations International, and Infonative Solutions. Only two new unicorns emerged during this period, a slight drop from three the year before. Acquisitions, on the flip side, surged—with 73 deals completed, a sizable increase of 35% from 54 reported the prior year. Two noteworthy transactions included Magma General Insurance being bought by DS Group and Patanjali Ayurved for $516 million and Hindustan Unilever Limited acquiring Minimalist for $350 million.

In the race for funding, Bengaluru remains the undisputed champion, securing 26% of the total funds, barely edging out Delhi, which garnered 25%. Major players in the investment arena include LetsVenture, AngelList, and Accel. In the seed stage, top performers were Venture Catalysts, 100X.VC, and Antler. And amongst venture capital firms, Accel (US) led the charge with 30 investment rounds, while Blume Ventures (India) added seven fresh startups to its portfolio.

In conclusion, while India’s startup funding in H1 2025 has seen a significant decline, dropping 25% from the previous year, it still managed to pull ahead in global rankings. The ecosystem demonstrated resilience with continued investment particularly in transportation, retail, and enterprise technology sectors. Notably, public listings and acquisition activities suggest that there is still a path for growth amidst the funding challenges. Bengaluru continues to lead as the prime city for startup investments, illustrating the country’s impactful tech landscape.

Original Source: www.business-standard.com