India's Tech Startups Raise USD 2.5B in Q1 2025, Becomes the Third Most-funded Country Globally In the first quarter of 2025, six companies went public, however, unlike Q1 of 2024, this quarter did not see the emergence of any new unicorns

Startups are a vital driving force behind economic prosperity and innovation. In developing countries especially, they serve as beacons of social development and transformation. In recent years, India's tech startup landscape has gained strong momentum, attracting substantial investments. In the first quarter of 2025 alone, Indian tech startups raised USD 2.5 billion in funding — a 13.64 per cent increase from the previous quarter and an 8.7 per cent rise year-on-year — making India the third most-funded country globally, after the US and the UK, according to Tracxn's Geo Quarterly India Tech Report.

Major funding deals during the quarter included over USD 100 million each raised by Erisha E Mobility, Darwinbox, and Infra Market. Late-stage funding surged to USD 1.8 billion, marking a 38.46 per cent jump from Q4 2024. However, early-stage and seed-stage funding saw a significant decline, indicating a shift in investor focus toward more mature and established startups.

Auto tech leads the charge

Auto Tech was the shining star this quarter, pulling in USD 1.1 billion — a massive 403 per cent jump from the previous quarter. Other strong sectors included Enterprise Applications (USD 650.7 million) and Retail (USD 481.5 million), both showing solid growth from Q4 2024, even if slightly lower compared to the same time last year.

"While the funding environment remains dynamic, India's startup ecosystem continues to demonstrate adaptability and growth… Innovation and BIZ Experiencesship remain at the core of this ecosystem," Neha Singh, Co-Founder of Tracxn noted.

IPOs, acquisitions, and city rankings

India has firmly established itself as a major hub for Initial Public Offerings (IPOs), attracting both domestic and international companies to its capital markets. Over the past five years, India has witnessed 851 IPOs, and experts project that this number could surpass 1,000 within the next two years. The IPO momentum is anticipated to be three times stronger than what was observed in the last half-decade.

In the first quarter of 2025, six companies went public, including Nukleus, Maxvolt Energy, Volercars, and Harshil Agrotech. However, unlike Q1 of 2024, this quarter did not see the emergence of any new unicorns—startups valued at over USD 1 billion.

On the acquisitions front, India recorded 38 deals in Q1 2025, marking a 15 per cent increase from the previous quarter and a 40 per cent rise year-on-year. The most significant transaction was the USD 516 million acquisition of Magma General by DS Group and Patanjali Ayurved, surpassing the previous record of Minimalist's USD 350 million deal with Hindustan Unilever (HUL).

Additionally, Delhi emerged as the leading city for startup funding, contributing to 40 per cent of the total capital raised, followed by Bengaluru at 21.64 per cent. Major investors this quarter included Accel, Blume Ventures, and Peak XV Partners, among others, reaffirming their strong presence in India's vibrant startup ecosystem.