India’s tech startups saw a strong surge in funding during Q1 (January-March) 2025 period, securing $2.5 billion in total investments. This marked a 13.64% increase from Q4 2024 and an 8.7% rise compared to the same period last year. The country ranked as the third highest-funded globally, following the United States and the United Kingdom.
The quarter was characterised by a sharp increase in late-stage funding, which totalled $1.8 billion. This represented a 38.46% rise from the previous quarter and an impressive 114.54% jump from Q1 2024. In contrast, early-stage funding dropped to $528 million, down 23.7% quarter-over-quarter, while seed-stage investments fell to $157 million, a decline of 55.77% year-over-year.
Several major funding rounds took place, including a $1 billion Series D round by Delhi-based electric vehicle company Erisha E Mobility. HR tech platform Darwinbox raised $140 million in a Series D round at a valuation of $947 million, while Infra.Market secured $121 million in a Series F round, valuing the company at $2.55 billion. The auto tech sector emerged as the best-performing category, attracting $1.1 billion, a 403.35% increase from Q4 2024. Other high-growth sectors included Enterprise Applications, which raised $650.7 million, and Retail, which saw $481.5 million in funding.
Mergers and acquisitions also saw a boost, with 38 deals recorded in the quarter, up 15.15% from the previous quarter. The largest acquisition was Magma General Insurance, which was purchased for $516 million, followed by the acquisition of Minimalist by HUL for $350 million. IPO activity gained momentum as well, with companies such as Nukleus, Maxvolt Energy, and Volercars going public. However, no new unicorns were created in the quarter, a significant shift from Q1 2024, when two companies reached the billion-dollar valuation mark.
Delhi led in total funding, attracting $1 billion and accounting for 40% of the overall investment, followed by Bengaluru with $541 million. Top investors included Accel, Blume Ventures, and Peak XV Partners.