While 2023 was the year of a funding lowdown, followed by 2024 being labelled as cautious stabilisation, 2025 seems to be marked by liquidity.
3 big trends in startup funding in 2025
Startup funding declined in absolute terms during the year. Indian technology startups raised $10.5 billion in 2025, compared with $12.7 billion in 2024 and $11 billion in 2023, according to Tracxn.
At the same time, the median deal size nearly doubled to about $1.4 million, from roughly $700,000 in the previous year, indicating greater selectivity in capital deployment.
There were 14 funding rounds that exceeded $100 million, it was 19 in 2024. Large transactions during the year included Erisha E Mobility’s $1 billion round, Zepto’s $450 million raise, and GreenLine’s $275 million funding.
IPOs restore exit momentum
While private funding experienced a slow growth, a recovery in startup IPOs kept the liquidity events accelerated. 18 startups, including Lenskart, Groww, Meesho and PhysicsWallah, listed on Indian exchanges in 2025, raising over Rs 41,000 crore, compared with Rs 29,000 crore in 2024.
“2025 was the year of liquidity,” Neha Singh, co-founder of Tracxn, told PTI, noting that several venture and private equity-backed firms accessed public markets during the year.
Market outcomes, however, were mixed. Urban Company listed at a 58.26% premium, while Meesho debuted at a 53% premium. In contrast, listings such as Lenskart and BlueStone saw more muted responses, reflecting tighter public market scrutiny.
Sectoral concentration remains intact
Retail, fintech, transportation, logistics and quick commerce emerged as the better-performing segments during the year, despite global trade disruptions and geopolitical uncertainty.
In terms of capital allocation, enterprise applications ($2.6 billion), retail ($2.4 billion) and fintech ($2.2 billion) continued to attract the bulk of funding. The year also saw 11 startups enter the unicorn club, including Netradyne, Porter, and Drools.
India now ranks as the world’s third-largest startup ecosystem, with projected annual growth of 12–15%, according to industry estimates.
“With around 200,000 DPIIT-recognised startups, 44,000 added this year alone, 11 new unicorns, and 18 public listings raising over Rs 41,000 crore, India is now the world’s third-largest startup ecosystem after the US and China,” Prashant Singhal, markets and telecommunications leader at EY India, told PTI.
Reverse flips gain pace
A notable trend during the year was the increase in “reverse flips, with startups relocating their headquarters from overseas jurisdictions to India ahead of domestic listings.
Companies such as Razorpay, Meesho and Flipkart completed or initiated relocations during the year. Others, including Zepto, Shiprocket and PhonePe, remain in the process.
The big forecast for 2026
Funding activity is expected to improve in 2026, supported by capital recycling following exits, new fund launches, and increased interest from limited partners. Singh told PTI that funding levels next year are likely to be higher than in 2025, as proceeds from exits are reinvested into the ecosystem. Artificial intelligence is expected to remain a key area of investor focus, alongside consumer-facing businesses, including direct-to-consumer brands and services.
