India’s tech startups raised $2.5 billion in the first quarter of 2025, showing a 13.64% increase from the previous quarter and an 8.7% rise from the previous financial year, making it the third most-funded country globally after the US and UK, according to a report by Tracxn.
A market intelligence platform report revealed that auto tech, enterprise applications, and retail were the top-performing sectors in the first quarter of 2025.
The report also highlighted a significant increase in funding for late-stage startups, both sequentially and year-over-year. In contrast, seed-stage startups and early-stage ventures saw a decline in total funding on both counts.
“In the first quarter of 2025, India’s tech startups raised $2.5 billion, marking a 13.64% increase from the previous quarter and an 8.7% rise from the same period last year, making it the third most-funded country globally, ahead of Malta and Germany and behind the US and UK,” according to the report.
India’s technology sector witnessed a surge in late-stage venture funding during the first quarter of 2025, according to the Geo Quarterly India Tech report. Late-stage startups secured $1.8 billion in investments, marking a 38.46% increase from the previous quarter and a substantial 114.54% rise year-over-year. Conversely, seed-stage funding saw a decline, with total investments reaching $157 million. This represents a 23.79% decrease from the preceding quarter and a significant 55.77% drop compared to the same period in 2024.
Early-stage startups in India secured a total of $528 million in funding during the first quarter of 2025, according to the Geo Quarterly India Tech report. This represents a 23.7% decrease compared to the fourth quarter of 2024 and a 52% decline year-over-year.
“While the funding environment remains dynamic, India’s startup ecosystem continues to demonstrate adaptability and growth,” Neha Singh, Co-Founder of Tracxn, said.
Sectors such as Auto Tech, Enterprise Applications, and Retail are attracting investor interest, and the rise in acquisitions signals a maturing market, Singh said.
“Innovation and entrepreneurship remain at the core of this ecosystem, positioning India for long-term success,” according to her.
The auto tech sector saw a significant funding influx of $1.1 billion in the first quarter of 2025, surpassing funding levels in both the fourth quarter of 2024 and the first quarter of 2024. Enterprise Applications companies received $650.7 million in funding, marking a 21.94% increase from the previous quarter but an 8.12% decrease compared to the same period last year.
The retail sector secured $481.5 million in funding, reflecting a 21.6% increase from the preceding quarter, though it represented a 2.3% decrease compared to the first quarter of 2024.
The report also noted that six companies went public in the first quarter of 2025. Among the companies that undertook initial public offerings were Nukleus, Maxvolt Energy, Volercars, and Harshil Agrotech.
There were no unicorns created in the first quarter of 2025, as opposed to two created in the first quarter of 2024.
A total of 38 acquisitions took place this quarter, marking a 15.15% increase from the previous quarter and a 40.74% rise over the first quarter of 2024.
“The largest deal was Magma General’s $516 million acquisition by DS Group and Patanjali Ayurved, making it the highest-valued acquisition of the first quarter of 2025, surpassing Minimalist’s $350 million acquisition by HUL,” the report said.
Delhi-based tech firms accounted for 40% of all funding seen by tech companies across India, followed by Bengaluru (21.64%).
Accel, Blume Ventures and Peak XV Partners were the overall all-time top investors for the first quarter of 2025. Venture Catalysts, Unicorn India Ventures and YourNest were the top seed-stage investors, while Avataar Ventures and Sofina were the top late-stage.
