India’s Tech Startups Raise $2.5 Billion in Q1 2025, Funding Grows 8.7%

India’s tech startup ecosystem attracted $2.5 billion in funding in the first quarter of FY25 (Q1 2025), marking an 8.7% increase from the same period last year and a 13.64% rise from the previous quarter, according to the Tracxn Geo Quarterly India Tech Report. This growth positions India as the third-largest startup funding hub globally, following the United States and the United Kingdom.

Three startups—Erisha E Mobility, Darwinbox, and Infra Market—secured over $100 million each, matching the number from the previous quarter. Late-stage startups received the highest funding, totaling $1.8 billion, up from $1.3 billion in Q4 FY24. Early-stage startups raised $528 million, while seed-stage firms secured $157 million.

Top Investment Hubs and Leading Investors

Delhi-based startups accounted for 40% of total funding, followed by Bengaluru (21.64%). The top investors in Q1 FY25 included Accel, Blume Ventures, and Peak XV Partners, with Venture Catalysts, Unicorn India Ventures, and YourNest leading seed-stage investments. Avataar Ventures and Sofina dominated late-stage investments.

Key Sectors Driving Growth

The auto tech sector saw a remarkable funding surge to $1.1 billion, up from $214.6 million in Q4 FY24. Enterprise applications attracted $650.7 million, a 21.94% increase, while retail startups secured $481.5 million, growing 21.67% from the previous quarter.

Acquisitions and IPOs

Q1 FY25 recorded 38 acquisitions, a 40.74% increase year-over-year. The largest deal was Magma General’s $516 million acquisition by DS Group and Patanjali Ayurved. However, no new unicorns were created this quarter.

Source: Business Standard