Summary:
India’s technology startup ecosystem secured Rs. 21,395 crore (US$ 2.5 billion) in funding during the first quarter (Q1) of the 2025 fiscal year (FY25). This represents an 8.7% increase compared to the same period in 2024 and a 13.64% rise from the previous quarter. With this growth, India has emerged as the third most-funded region globally, trailing only the United States and the United Kingdom. Late-stage startups led the funding surge, receiving Rs. 15,404 crore (US$ 1.8 billion) in Q1 FY25, a significant jump from Rs. 11,125 crore (US$ 1.3 billion) in Q4 FY24. Seed-stage companies attracted Rs. 1,343.61 crore (US$ 157 million), while early-stage ventures secured Rs. 4,518 crore (US$ 528 million). Notably, tech companies headquartered in Delhi dominated the funding landscape, accounting for 40% of the total funds raised, followed by Bengaluru, which secured 21.64%. The quarter’s leading investors included Accel, Blume Ventures and Peak XV Partners, actively participating in various funding rounds.
At the seed-stage level, Venture Catalysts, Unicorn India Ventures and YourNest emerged as prominent backers. For late-stage investments, Avataar Ventures and Sofina stood out. Additionally, Accel, Peak XV Partners and Vertex Ventures led the charge in early-stage funding rounds. Sector-wise, the report highlighted notable interest in auto tech, enterprise applications and retail. Enterprise applications attracted significant capital, with funding reaching Rs. 4,120.68 crore (US$ 481.5 million), reflecting a 21.67% quarter-on-quarter increase. A total of six unicorns opted for initial public offerings (IPOs) during Q1 FY25, including prominent names like Nukleus, Maxvolt Energy, Volercars and Harshil Agrotech. However, no new unicorns emerged this quarter, in contrast to two formed in Q1 FY24. On the mergers and acquisitions front, the period saw 38 deals finalized, marking a 15.15% increase from the previous quarter and a substantial 40.74% rise yearover-year. The largest acquisition was Magma General’s Rs. 4,416 crore (US$ 516 million) buyout by DS Group and Patanjali Ayurved. This deal surpassed Hindustan Unilever’s Rs. 2,995 crore (US$ 350 million) acquisition of Minimalist. Ms. Neha Singh, Co-founder of Tracxn, commented on the resilience and evolution of India’s startup ecosystem. She noted that the vibrant funding landscape underscores the adaptability and innovation driving the sector. With continuous investor interest in key industries such as auto tech, enterprise applications and retail and the rise in acquisition activity, the ecosystem is steadily maturing and positioning itself for long-term growth.
Source: IBEF
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