India’s Startup Funding Surges as Investors Raise the Bar
Tech ventures raised $9.1 billion in 2025, up 23% from a year earlier, as capital shifts toward scalable, execution-ready businesses over growth at any cost.
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Indian tech startups raised $9.1 billion in 2025, up 23% from a year earlier, even as investors favored scalable, commercialization-ready ventures, a Nasscom-Zinnov study said.
DeepTech firms accounted for $2.3 billion of the total, with funding in the segment rising 37% year on year, according to the report.
Titled Momentum to Maturity: India’s Start-up Ecosystem at a Strategic Inflection Point, the study describes an ecosystem entering a more disciplined phase, marked by selective capital deployment and a sharper focus on monetization.
“India’s startup ecosystem is entering a more disciplined phase of growth, and AI is clearly at the center of this transition,” said NASSCOM President Rajesh Nambiar. “The next chapter will be defined by how effectively we translate AI innovation into market adoption, intellectual property, and globally competitive platforms.”
Artificial intelligence dominated DeepTech activity, accounting for 84% of DeepTech startups and 91% of DeepTech funding in 2025, reflecting its expanding role across enterprise software, cybersecurity, defense and industrial systems.
Early-stage activity remained robust, with 74% of total deal volume concentrated at seed and early rounds, indicating a steady innovation pipeline despite tighter capital conditions.
India is now home to more than 4,200 DeepTech startups and between 31,000 and 34,000 startups overall, including more than 550 founded in 2025 alone, the report said.
Technology mergers and acquisitions also accelerated, with more than 140 deals recorded in 2025, nearly double the previous year. Indian corporates accounted for about 36% of total M&A activity, highlighting a rise in capability-led acquisitions.
Startup patent filings have increased roughly 68% since 2020–21, signaling growing emphasis on product development and intellectual property creation.
Pari Natarajan, CEO of Zinnov, said the ecosystem’s challenge now lies in converting innovation into sustainable growth.
“Capital is returning, but it is rewarding execution, customer validation, and repeatable value creation,” he said, adding that the next phase will depend on shortening the path from seed funding to commercial scale.
The report concluded that while India has built strong early-stage innovation capacity, the next opportunity lies in strengthening commercialization pathways and aligning growth capital with scaling requirements.
