In 2025, India’s startup ecosystem secured nearly $11 billion in funding, despite a 39% drop in the number of deals, which totaled 1,518. Overall funding decreased by just over 17% to $10.5 billion. The dynamics of funding stages revealed contrasting trends, with seed-stage investments plummeting by 30% to $1.1 billion, and late-stage funding also declining by 26% to $5.5 billion. However, early-stage funding showed resilience, climbing 7% to reach $3.9 billion. Neha Singh of Tracxn highlighted a shift in capital deployment towards early-stage startups, driven by confidence in founders with strong product-market fit and revenue prospects.
In the realm of AI, Indian startups raised over $643 million through 100 deals, marking a modest 4.1% increase from the previous year. Early-stage AI funding accounted for $273.3 million, while late-stage rounds brought in $260 million. This contrasts sharply with the U.S., where AI funding soared to over $121 billion across 765 rounds, a 141% increase, predominantly in late-stage deals. According to Prayank Swaroop of Accel, India lacks large AI-first companies and needs time to develop the necessary research depth, talent, and patient capital.
Investors in India are increasingly focusing on manufacturing and deep-tech sectors, where the country has advantages in talent, cost structures, and customer access, and faces less global competition for capital.
