India’s tech startups raised $2.5 billion in the first quarter of 2025, a 13.64% increase from the previous quarter and an 8.7% rise from the previous financial year.
This makes India the third most-funded country globally after the US and UK. Reports show that auto tech, enterprise applications, and retail were the top sectors in Q1 2025. Late-stage startups saw a big increase in funding.
However, seed-stage and early-stage ventures saw a decline in total funding. Late-stage startups in India secured $1.8 billion in investments in Q1 2025, a 38.46% increase from the previous quarter.
It is also a 114.54% rise year-over-year. On the other hand, seed-stage funding dropped. Total investments reached $157 million, a 23.79% decrease from the last quarter.
This is also a 55.77% drop compared to the same period in 2024. Early-stage startups in India received $528 million in funding in Q1 2025, a 23.7% decrease compared to Q4 2024.
It also shows a 52% decline year-over-year. While the funding environment remains dynamic, India’s startup ecosystem continues to demonstrate adaptability and growth,” said Neha Singh, Co-Founder of Tracxn. Sectors like Auto Tech, Enterprise Applications, and Retail are attracting investors.
India’s tech funding growth analyzed
The rise in acquisitions also shows a maturing market. In Q1 2025, the auto tech sector received $1.1 billion in funding.
This is more than in Q4 2024 and Q1 2024. Enterprise Applications companies received $650.7 million, a 21.94% increase from the previous quarter. But this is an 8.12% decrease compared to last year.
The retail sector secured $481.5 million, a 21.6% increase from the last quarter. However, it is a 2.3% decrease compared to Q1 2024. Reports also noted that six companies went public in Q1 2025.
These included Nukleus, Maxvolt Energy, Volercars, and Harshil Agrotech. No new unicorns were created in Q1 2025, compared to two in Q1 2024. There were 38 acquisitions this quarter, a 15.15% increase from the previous quarter.
It is also a 40.74% rise over Q1 2024. The largest deal was Magma General’s $516 million acquisition by DS Group and Patanjali Ayurved. This surpassed Minimalist’s $350 million acquisition by HUL.
Delhi-based tech firms accounted for 40% of all funding seen by tech companies across India. Bengaluru followed at 21.64%. Accel, Blume Ventures, and Peak XV Partners were overall top investors for Q1 2025.
Venture Catalysts, Unicorn India Ventures, and YourNest were the top seed-stage investors. Avataar Ventures and Sofina were the top late-stage investors.
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