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Bengaluru: Investments into Indian tech startups continue their slowdown, found a report on Wednesday. Between January 1 and June 25 of 2025, they raised $4.8 billion, as per the report by market intelligence platform Tracxn. This marks a 25 per cent decline from $6.4 billion in the January to June period of 2024 (H1 2024), and a 19 per cent drop from $5.9 billion in the July to December 2024 period.
Despite this, India moved up globally. The country jumped to third place globally in tech startup funding for the period, following the US (at $125.8 billion) and the UK (at $7.9 billion). It moved up from fourth place in H1 2024.
Bengaluru accounted for 26 per cent of the funds, followed by Delhi at 25 per cent.
The funding landscape across different stages showed a consistent downward trend. Seed-stage funding declined 44 per cent year-on-year (YoY) to $452 million. Early-stage startup investments dropped 16 per cent YoY to $1.6 billion. Late-stage funding fell 27 per cent YoY to $2.7 billion.
In terms of sectors, transportation and logistics tech performed the best, raising $1.6 billion - a 54 per cent increase YoY. This was followed by retail at $1.2 billion (32 per cent YoY drop) and enterprise applications at $1.1 billion (26 per cent YoY reduction).
“The general sentiment has been low for most sectors. This is not just an outcome of the past six months. Bigger funds are hurting in particular, following investments in firms like Byju’s and Unacademy. Going from billions of dollars of valuation to bankruptcy also means people have lost jobs. For sentiments to rise going forward, some significant event needs to happen, like a very successful IPO or acquisition,” explained Parag Dhol, General Partner at Athera Venture Partners.
The period under review witnessed five funding rounds exceeding $100 million, compared to nine such rounds in H2 2024 and 10 in H1 2024. Erisha E Mobility stood out with a $1 billion Series D round.
Dhol added that though India has bagged the third spot globally, the bigger question is whether this sustains.
Neha Singh, co-founder of Tracxn agreed, pointing to a shift in investor sentiment from the exuberance of previous years to a more cautious approach and global economic uncertainty including rising interest rates, geopolitical tensions, and fears of inflation making investors more risk-averse.
“While the dip may have been an outcome of current geopolitics, some deals are yet to be announced. Investors are looking at India which provides more political and economic stability than other markets, and the coming quarters look stronger,” predicted Anil Joshi, founder and Managing Partner at Unicorn India Ventures.