India’s startup ecosystem raised nearly $11 billion in 2025, reflecting continued investor confidence but underlining a shift toward strategic capital deployment and discernment in funding decisions. The total amount capitalised was about 17 % lower than in 2024, with the number of funding rounds dropping nearly 39 %, signalling that investors are writing fewer but more intentional checks focusing on product-market fit, revenue potential and clear unit economics. Seed and late-stage funding saw notable declines, reflecting risk aversion, while early-stage funding grew modestly, indicating persistent interest in startups that can demonstrate scalable business models early on.

The Indian AI funding landscape also evolved differently from global patterns: startups in this category raised a moderate $643 million across around 100 deals, with greater emphasis on application-led AI solutions rather than capital-intensive foundation model development. Investors increasingly viewed sectors like consumer tech, manufacturing, fintech and deep-tech as priority areas where India holds strategic advantages due to its talent pool, cost structure and large domestic market.

Participating investors also became more concentrated, with domestic funds playing a larger role and total investor count falling sharply, highlighting local capital’s growing prominence. Complementing private investment, government initiatives — such as a substantial Fund of Funds and a major R&D and innovation programme — aimed to catalyse private capital and reduce regulatory uncertainty.

Overall, while headline funding figures dipped compared with previous years, India’s startup ecosystem demonstrated maturity and resilience, with focused investment patterns, stronger domestic investor participation and evolving sectoral priorities shaping its trajectory into 2026.