India's startup funding takes a hit, but early-stage and AI show promise
In 2025, India's startups raised $10.5 billion across 1,518 deals—a 17% drop in funding and 39% fewer deals than last year.
Even with this slowdown, India still holds the third spot worldwide for startup investments, as the world's third most-funded startup market.
What's happening with funding?
Seed funding fell sharply by 30% to $1.1 billion and late-stage rounds dropped by 26% to $5.5 billion.
On the bright side, early-stage funding actually grew by 7%, reaching $3.9 billion—showing investors are betting on startups with real revenue potential right now.
The number of active investors also halved to around 3,170, with Indian funds making up nearly half of all activity.
Spotlight on AI and government moves
AI startups bucked the trend by raising $643 million through mostly early-stage deals—a small but notable increase from last year.
Plus, government efforts like a new $1.15 billion Fund of Funds and a ₹1 trillion R&D scheme have sparked fresh deep-tech commitments from big names like Accel and Blume (with NVIDIA giving advice), aiming to boost innovation even as overall funding cools down.