India’s tech startups raised $2.5 billion in the first quarter of FY25, reflecting a 13.64% increase from the previous quarter and an 8.7% growth compared to Q1 FY24, according to a report released on Monday. With this funding, India remains the third-largest startup investment hub globally, following the United States and the United Kingdom.
Major Funding Highlights
According to the Tracxn Geo Quarterly India Tech Report, out of the total $2.5 billion raised, three startups, including Erisha E Mobility, Darwinbox, and Infra Market, secured over $100 million each, matching the number from the previous quarter.
- Late-stage startups led funding rounds, attracting $1.8 billion, a jump from $1.3 billion in Q4 FY24.
- Early-stage startups secured $528 million, while seed-stage startups raised $157 million.
Delhi-based tech firms led the funding landscape, accounting for 40% of the total investments, followed by Bengaluru with 21.64%.
Top Investors
- Accel, Blume Ventures, and Peak XV Partners were the most active investors in Q1 FY25.
- Venture Catalysts, Unicorn India Ventures, and YourNest dominated seed-stage investments.
- Avataar Ventures and Sofina were top late-stage investors, while Accel, Peak XV Partners, and Vertex Ventures led early-stage funding.
Top-Performing Sectors
The report identified auto tech, enterprise applications, and retail as the fastest-growing sectors:
- Auto tech witnessed a funding surge to $1.1 billion, up from $214.6 million in Q4 FY24.
- Enterprise applications secured $650.7 million, reflecting a 21.94% rise from the previous quarter.
- Retail investments increased 21.67% to $481.5 million from $395.8 million in Q4 FY24.
IPOs & Unicorns
Six companies, including Nukleus, Maxvolt Energy, Volercars, and Harshil Agrotech, went public in Q1 FY25. However, no new unicorns emerged this quarter, in contrast to two unicorns formed in Q1 FY24.
Acquisitions
The quarter saw 38 acquisitions, marking a 15.15% increase from the previous quarter and a 40.74% rise compared to Q1 FY24. The largest deal was Magma General’s $516 million acquisition by DS Group and Patanjali Ayurved, surpassing Minimalist’s $350 million acquisition by Hindustan Unilever.
India’s startup ecosystem continues to gain momentum, with increasing investments, sectoral growth, and rising M&A activity reaffirming its position as a key player in the global tech landscape.
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