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India’s startup investment landscape in 2025 presents a complex picture of retrenchment, selective risk deployment, and emerging structural shifts. On aggregate, total funding slid to about $10.5 billion, down ~17% from 2024, while number of deals fell nearly 39% to ~1,518 rounds. ([techcrunch.com](https://techcrunch.com/2025/12/27/india-startup-funding-hits-11b-in-2025-as-investors-grow-more-selective/?utmsource=openai)) Funding by stage diverged: only early-stage showed resilience with ~7% growth to $3.9 billion, while seed-stage plunged ~30%, late-stage declined ~26%. ([techcrunch.com](https://techcrunch.com/2025/12/27/india-startup-funding-hits-11b-in-2025-as-investors-grow-more-selective/?utmsource=openai))
The AI sector in India saw modest gains—about $643 million across 100 deals, up just 4% YoY. Investments were heavily skewed toward application-led and early growth stages rather than foundational deep learning or large model R&D. ([techcrunch.com](https://techcrunch.com/2025/12/27/india-startup-funding-hits-11b-in-2025-as-investors-grow-more-selective/?utmsource=openai)) Meanwhile, the U.S. AI funding surged past $121 billion across 765 deals in 2025, with late‐stage dominance—underscoring India’s developmental distance in AI scaling. ([techcrunch.com](https://techcrunch.com/2025/12/27/india-startup-funding-hits-11b-in-2025-as-investors-grow-more-selective/?utmsource=openai))
Women’s participation in funding remained flat in dollar terms (~$1 billion) but eroded in opportunity: first-time rounds and number of rounds fell roughly 40%. This signals persistent gender gaps, particularly at the entry stages. ([techcrunch.com](https://techcrunch.com/2025/12/27/india-startup-funding-hits-11b-in-2025-as-investors-grow-more-selective/?utmsource=openai))
The investor landscape narrowed significantly. Total participating investors dropped by over half (~53%), with domestic investors contributing nearly half the funding activity. Number of $100 million+ rounds declined (from 19 in 2024 to 14 in 2025). Major late deals—such as Erisha E Mobility (~$1 billion), Zepto, GreenLine—pulled up the tail, but concentration increased. ([w.tracxn.com](https://w.tracxn.com/report-releases/india-tech-annual-funding-report-2025?utmsource=openai))
On exits, 2025 saw stronger IPO and M&A activity: 42 tech IPOs (up 17%) and 136 acquisitions (up ~7% YoY) in India. But new unicorn creation remained flat—5 in both 2024 and 2025—while market expectations continue to recalibrate especially for late-stage scale. ([w.tracxn.com](https://w.tracxn.com/report-releases/india-tech-annual-funding-report-2025?utmsource=openai))
Strategically, India appears refocusing along lines where local competitive advantage—consumer scale, logistics, application layers of AI, deep tech near manufacturing, enterprise software—matter more than capital-intensive foundational model building. Government programmes to de-risk long-term investment (e.g. Research, Development & Innovation schemes; Fund of Funds) can shift the risk-return trade-off for early-growth and deep tech. ([techcrunch.com](https://techcrunch.com/2025/12/27/india-startup-funding-hits-11b-in-2025-as-investors-grow-more-selective/?utmsource=openai))
