In 2025, India’s startup sector attracted nearly $11 billion in investment, yet the number of funding rounds plummeted by approximately 39% to just 1,518 deals, according to Tracxn. This trend highlights a shift in investor behavior, with a notable increase in selectivity regarding risk-taking in the often volatile startup landscape.
Funding amounts showed a less dramatic decline, reducing by just over 17% to $10.5 billion. However, the decline was not consistent across all stages; seed-stage investments fell by 30% to $1.1 billion, while late-stage funding decreased by 26% to $5.5 billion. In contrast, early-stage funding rose by 7% to $3.9 billion, indicating a growing confidence in startups demonstrating solid product-market fit.
AI startups in India secured just over $643 million across 100 deals, marking a modest increase of 4.1% year-on-year. Most of this funding went to early-stage ventures, with early-stage AI attracting $273.3 million and late-stage rounds gathering $260 million. This diverges sharply from the U.S. market, where AI funding skyrocketed past $121 billion in 2025, primarily driven by late-stage investments.