The Indian tech startups ecosystem has demonstrated remarkable resilience in the first half of 2025, moving up to the third position globally in terms of total funding raised, despite a 25% year-on-year decline in capital inflow. According to a report by market intelligence platform Tracxn, Indian startups raised a total of $4.8 billion in H1 2025, a significant drop from the $6.4 billion raised during the same period in 2024. However, this performance allowed India to surpass traditional innovation hubs like Germany and Israel, trailing only the United States and the United Kingdom.
The decline in funding is attributed to a combination of global macroeconomic headwinds, cautious investor sentiment, and geopolitical tensions. As investors prioritize sustainability and profitability over hyper-growth, the number of large-ticket funding rounds has decreased. H1 2025 saw only five mega-deals (over $100 million), a considerable drop from the 10 such deals in H1 2024.
Despite this overall slowdown, key sectors in India’s startup landscape are attracting significant capital. Transportation and logistics tech emerged as a top-performer, raising $1.6 billion in H1 2025, a 54% increase year-on-year. Other sectors like retail and enterprise applications also attracted major investments.
The report also highlighted that the funding landscape is shifting. Bengaluru maintained its lead as the top funding hub, accounting for 26% of the total funds raised, with Delhi NCR closing in at 25%. The drop in funding is prompting startups to focus on sound business fundamentals, operational efficiency, and a clear path to profitability rather than relying on high-burn models. This shift, while challenging, is seen by analysts as a sign of the ecosystem’s increasing maturity and ability to navigate a more disciplined funding climate.
Key Highlights:
- Indian tech startups raised $4.8 billion in the first half of 2025, marking a 25% decline from the same period in 2024.
- Despite the decline, India’s startup ecosystem climbed to the third position globally in total funding, behind only the US and the UK.
- The funding slowdown is a global trend, pushing investors to prioritize profitability and sustainable business models over rapid growth.
- The transportation and logistics tech sector showed strong growth, and Bengaluru and Delhi remained the leading funding hubs in India.