Startup Ecosystem in India 2025

India has the 3rd largest startup ecosystem in the world with an impressive year-on-year growth rate of 12-15%.

Explore India's Vibrant Startup Ecosystem

Currently India has over 130,000+ startups  registered according to DPTII. In more than 67 thousand startups at least one women director is Their. From 2019 to 2023, Indian startups have successfully raised more than US$70 billion in funding.

 India has now become the world’s fifth-largest economy, fueled by a vibrant startup ecosystem and strong entrepreneurial spirit. After the US and China, India ranks third globally. This dynamic landscape, driven by a young, tech-savvy population, skilled IT professionals, and supportive government policies, offers vast opportunities for aspiring entrepreneurs.

India’s startup ecosystem is poised for rapid expansion, with an annual rate of 12-15%. The country ranks second in innovation quality among middle-income economies, showcasing its ability to foster groundbreaking ideas. As of January 2024, India is home to 110+ unicorn startups valued at over US$ 350 billion. Notably, the rise of women-led startups, now comprising 18%, of the ecosystem, highlights the inclusivity and immense potential of this vibrant sector.

Why Startup Ecosystem is Booming in India?

India's startup ecosystem is booming due to a combination of robust government support and increasing corporate collaborations. Its making a global hotspot for innovation.

Government support to Indian Startup

The Government of India recognizes the importance of collaborating with disruptive innovators across various sectors to enhance public service delivery. By the use of innovations, the government wants to provide better service to their citizens. This forward thinking approach shows the importance of tech driven startups and their role in shaping India.

Corporate Connect

Enterprises are increasingly recognizing the disruptive potential of start-ups and are actively partnering/investing in them.

India’s Tech Startup Ecosystem

After the Nasscom and Zinnov report on the Indian Tech Startups for 2023 confirms that India is the third-largest tech startup ecosystem in the world, in 2023, more than 950 tech startups were launched, adding to a total of over 2023, 31,000 tech startups in the past decade. From 2019 to 2023, these startups received more than US$ 70 billion in funding, showing strong  growth and investment in the Indian tech startups sector.

The report highlighted that improved Internet connectivity, digitalization, and government-led initiatives have greatly helped startups. From 2014 to 2023, the sectors include retail, enterprise applications,transportation and logistics technology, fintech, food and agriculture tech, travel and hospitality tech, auto technology and edtech.

Unfunded tech startup founders except higher revenues in 2024 compared to those with funding.

Funding Scenario in Tech Startups

Indian tech startups raised US$ 4.1 billion in the first half of 2024, 4% increase from the US$ 3.96 billion raised in the second half of 2023. This remains the fourth-highest funded country in the world for tech startups, according to the Tracxn report, which looked at funding trends in the Indian tech startup scene.

Since 2021, Startup funding in India has been declining, due to higher interest rates set by central banks. This ended the period of low interest rate during the covid era,  leading to reduced venture funding as risk-capital investors.

The report shows that seed stage funding reached US$ 455 million, a 17.3% drop  from the first half of 2023 but a 6.5% increase compared to the second half of 2023. Early stage startups held a valuation of US$ 1.3 billion, 28% less than in H1 2023 but similar to H2 2023. Late-stage funding decreased by 1.3% from H1 2023 to US$ 2.4 billion, yet increased by 3.8% from H2 2023.

Despite these challenges, eight large funding rounds over US$ 100 million were completed in the first half of 2024. Some of the early-stage active investors are Peak XV Partners, Global Alpha Waves, and Saama Capital.

Major funding rounds in 2024 included Capillary Technologies raising US$ 95 million in February, a lending platform getting $90 in June, and Perfios’ receiving US$ 80 million from the Ontario Teachers’ Pension Plan in March.

Startup Funding Report 2025

Here is round-up report of funding in various industries in year 2024.

• EV Startup Funding Report 2024
• Venture Capital & Angle funds Report 2024
• SaaS Startup Funding Report 2024
• Fintech Startup Funding Report 2024
• AI Startups Funding Report 2024
• Agritech Startup Funding and Investment Report 2024

Challenges Startups are Facing

Indian startups face challenges in getting enough funding for their ventures. Limited access to capital slows down their growth and limits innovation. Many Startups face challenges in attracting new investors and securing venture capital because of factors, like risk aversion, uncertain market conditions, and low  investor confidence.

In 2024, technology, especially in manufacturing and hardware, could help boost the economy  despite high valuations. AI is expected to play a big role in driving growth across industries, focusing more on creating value then just growing fast with a focus on value creation rather than just scaling  for IP-driven startups. While sectors  such as AI, fintech, healthtech, enterprise software, and sustainability tech may attract more investors by late 2024, D2C brands might face funding challenges due to saturation in the market.

Conclusion - India's Startup Ecosystem

Even with positive factors like lower inflation and reduced currency challenges issues, the startup landscape scene might not fully recover in 2024 for new ventures. Investors are now focusing on profitable, long term businesses instead of just  new ideas to mitigate risks.