Indian Startups Funding Trends in 2025

Funding for Indian startups experienced a decline, falling below $3 billion in the September quarter of 2025. This slowdown follows a series of quarters that consistently exceeded this threshold. The decrease in funding was largely influenced by substantial debt rounds from PharmEasy and Eruditus, as well as pre-IPO financing involving Urban Company, IndiQube, and Smartworks. Additionally, late-stage deals from companies like Gupshup, Truemeds, Kapiva, and The Sleep Company contributed to the overall figures. However, regulatory actions, such as the ban on real money gaming, negatively impacted the sector, resulting in approximately 2,000 job losses—marking one of the largest layoffs in the industry since 2023 and 2024.

According to aggregated data from various sources, Indian startups secured around $2.78 billion in funding during the third quarter of 2025. This total featured 67 growth and late-stage deals that amounted to $2.02 billion and 225 early-stage deals worth $765 million. Furthermore, there were 33 undisclosed transactions in this timeframe.

Quarterly and Monthly Trends

Compared to the prior quarter, funding in Q3 saw a nearly 10 percent drop. This represents the first time since Q1 2024 that quarterly funding has gone below the $3 billion mark. It is worth noting that September alone crossed the $1 billion threshold for the first time in four months. With a total of $1.22 billion in funding, September was also recognised as the second-highest funded month in 2025, second only to January’s $1.76 billion.

Top 15 Growth-Stage Deals

In the September quarter of 2025, the top 15 funding deals illustrated a cautiously optimistic startup ecosystem. PharmEasy led with $193 million in debt, followed closely by Weaver Services, which raised $170 million for its housing finance platform. Eruditus secured $150 million (debt), while Urban Company fetched $97 million ahead of its IPO. Healthtech saw notable investments, with Truemeds raising $85 million and Safe Security acquiring $70 million. Additionally, Gupshup raised $60 million in the conversational AI sector. Consumer brands Kapiva and The Sleep Company secured $60 million and $56 million respectively. Other significant deals included Amnex Technologies ($52 million), Recur Club ($50 million), CityMall ($47 million), Zepto ($46 million), IndiQube ($44 million pre-IPO), and Darwinbox ($40 million).

Top 15 Early-Stage Deals

Despite the downturn, investor interest remained strong in sectors such as AI, healthtech, and e-commerce. In Q3, some of the most notable funding round included QpiAI raising $32 million for quantum computing and AI solutions, Composio obtaining $25 million for agentic AI, and TERN Group collecting $24 million for its global talent mobility platform. Other key deals represented FirstClub and Emergent, each securing $23 million, while Arintra raised $21 million for its medical coding platform.

Mergers and Acquisitions

The September quarter witnessed significant acquisition activity among Indian startups in areas like AI, Fintech, Healthtech, and FMCG. Notable acquisitions included Zoho Corp purchasing Asimov Robotics, Udaan’s takeover of ShopKirana, Uniphore’s acquisition of Orby AI, and Flipkart’s acquisition of a majority stake in Pinkvilla. Fintech acquisitions by Niyo, Partners Group, and PayU underscored ongoing growth and consolidation within the startup ecosystem.

City and Segment-Wise Deals

In the September quarter, Bengaluru led with 128 deals valued at $1.06 billion (37.9%). This was followed by Mumbai with 41 deals amounting to $753.7 million (27.1%) and Delhi-NCR with 74 deals that raised $530.4 million (19%). Hyderabad and Ahmedabad both observed 14 deals, with $85.7 million (3.1%) and $162.3 million (5.8%) respectively.

In terms of segments, Fintech led with 34 deals worth $556.3 million (19.97%), closely followed by E-commerce with 53 deals totalling $436.1 million (15.65%). Healthtech recorded 18 deals worth $342.2 million (12.28%), while AI drove 37 deals raising $277.1 million (9.95%). Deeptech accounted for 20 deals that secured $63.8 million (2.29%).

Series-Wise Deals

The Indian startup ecosystem in the September quarter showcased considerable early-stage funding, with 41 Pre-seed deals raising $48.3 million and 102 Seed rounds totaling $179.2 million. Series A deals were prominent, collecting $536.1 million across 56 rounds, while Pre-Series A funding amounted to $86.6 million from 39 deals. Series B rounds also remained active, with 19 deals raising $304.8 million.

Layoffs, Shutdowns, and Departures

Following a period of decline, layoffs within Indian startups surged, with nine companies cutting nearly 2,000 positions, largely affecting the gaming sector. The government’s enforcement of the new Gaming Law has increased pressure, and further job losses are anticipated soon. On the shutdown front, several gaming firms have discontinued their real-money gaming verticals, while some non-gaming startups have ceased operations due to a host of challenges.

During this period, the startup ecosystem observed noticeable departures among top executives. Data indicated that 13 high-ranking executives, including CEOs, CBOs, CFOs, co-founders, managing directors, and presidents, resigned, while 79 key hirings took place.

Emerging Trends

In the farm-to-fork sector, funding has risen despite previous shutdowns. Handpickd raised $15 million, and Kisan Konnect secured $8 million recently, bolstering the sector. However, startups such as Otipy, Fraazo, and Deep Rooted closed operations after raising $49 million, $61 million, and $20 million respectively.

Another notable trend is the timely exit; Swiggy sold its stake in Rapido for a total of Rs 2,399.5 crore, with Rs 1,968 crore allocated to MIH Investments, a Prosus Group company, and Rs 431.5 crore to Setu AIF Trust and WestBridge, yielding over a 2.5 times return on its investment made in less than four years.

Moreover, startups are increasingly favouring debt over equity to manage their finances. PharmEasy raised $193 million for loan repayments, Eruditus secured $150 million via refinancing, while other firms like Fibe, Navi, and Varthana also opted for debt funding. Consequently, debt financing constituted 16% of total fundraising in the September quarter.