India's tech startups raise $2.5 billion in Q1 2025, up 8.7% from 2024

Marking a 13.64 per cent increase from the previous quarter and an 8.7 per cent rise from the same period last year, India’s tech startups raised $2.5 billion in the first quarter of financial year 2025 (Q1 FY25), according to a report released on Monday. With this, India ranks third among the highest-funded geographies globally, after the United States and United Kingdom.

 

According to the Tracxn Geo Quarterly India Tech Report, of the $2.5 billion raised, three startups—Erisha E Mobility, Darwinbox, and Infra Market—received funding of over $100 million each, the same number as in the fourth quarter of FY24.

 

Across different stages of investment, late-stage startups attracted the highest total funding of $1.8 billion in Q1 FY25, compared to $1.3 billion in Q4 FY24. Seed-stage startups raised $157 million, while early-stage startups secured $528 million.

 

Delhi-based tech firms accounted for 40 per cent of the total funding raised by tech companies across India, followed by Bengaluru with 21.64 per cent.

Top investors

Accel, Blume Ventures, and Peak XV Partners were the top all-time investors in Q1 FY25. Venture Catalysts, Unicorn India Ventures, and YourNest led seed-stage investments, while Avataar Ventures and Sofina were the top late-stage investors. Accel, Peak XV Partners, and Vertex Ventures were the top early-stage investors this quarter.

Top-performing sectors

The report highlighted that auto tech, enterprise applications, and retail were the top-performing sectors during the quarter. Funding in auto tech surged to $1.1 billion, compared to $214.6 million in Q4 FY24. Enterprise applications attracted $650.7 million, a rise of 21.94 per cent from $533.6 million in the previous quarter. Retail recorded $481.5 million, up 21.67 per cent from the previous quarter’s $395.8 million.

Unicorns created

A total of six companies went for initial public offerings (IPOs) in Q1 FY25, including Nukleus, Maxvolt Energy, Volercars, and Harshil Agrotech. However, no new unicorns were created in this quarter, compared to two in Q1 FY24.

Acquisitions

A total of 38 acquisitions took place in Q1 FY25, marking a 15.15 per cent increase from the previous quarter and a 40.74 per cent rise from 27 acquisitions in Q1 FY24. The largest deal was Magma General’s $516 million acquisition by DS Group and Patanjali Ayurved, making it the highest-valued acquisition of the quarter, surpassing Minimalist’s $350 million acquisition by Hindustan Unilever.

 

Speaking at the launch of the report, 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.”