Funding in Indian tech startups has increased by 8.7 per cent in the first quarter of the calendar year 2025 from the year-ago period. Investors put in $2.5 billion during the January-March 20 quarter, growing from $2.3 billion during Q1 2024 even as the number of funding rounds declined by 59 per cent to 237 during Q1 this year from 580 in Q1 last year, data from Tracxn showed.
The growth in funding value with the decline in deal volume indicates investors are turning more selective and picking businesses that show stronger business fundamentals, transparent revenue models and the road to profitability and proven traction instead of spreading money thinly across many bets.
Quarter-on-quarter, the startup investment jumped 13 per cent from $2.2 billion invested in Q4 (October-December) 2024. However, deal volume dropped by 32 per cent from 349 deals recorded in Q4 last year.
According to the report, late Stage recorded $1.8 billion in funding in Q1 2025, growing by 38.46 per cent compared to $1.3 billion raised in Q4 2024. On the other hand, seed stage funding saw a drop of 23.79 per cent to $157 million in Q1 2025 from $206 million raised in Q4 2024, and a drop of 55.77 per cent compared to $355 million raised in Q1 2024.
Early-stage funding also dropped by 23 per cent to $528 million in Q1 2025 from $692 million raised in Q4 2024 and saw a drop of 52 per cent compared to $1.1 billion raised in Q1 2024.
Speaking on the funding environment during Q1, Neha Singh, Co-Founder of Tracxn, said while the funding environment remains dynamic, India’s startup ecosystem continues to demonstrate adaptability and growth.
“Key sectors like auto tech, enterprise applications, and retail are attracting investor interest, and the rise in acquisitions signals a maturing market. Innovation and entrepreneurship remain at the core of this ecosystem, positioning India for long-term success,” Singh said.
The top rounds during the first quarter this year were $1 billion raised by Erisha E Mobility, $140 million by Darwinbox, $121 million by Infra.Market, $75 million by udaan and $70 million by InsuranceDekho.
Institutional investors Venture Catalysts, Unicorn India Ventures, YourNest and Accel with four investments each dominated the seed-stage deal volume while early-stage deals were led by Peak XV Ventures and Vertex Ventures with three investments each.
City-wise, Delhi with $1 billion investment had 42 per cent share in investments during Q1 this year followed by Bengaluru with 22 per cent share, 8 per cent with Gurugram and 7 per cent each with Hyderabad and Mumbai.