New Delhi: After a prolonged funding slowdown, 2025 emerged as the year of liquidity for Indian startups, marked by a revival in public listings, improved deal quality and a decisive shift toward disciplined
growth. If 2023 was defined by a "funding winter" and 2024 by cautious optimism, 2025 will be remembered for a historic rise in exits, particularly through the public markets.
While overall funding volumes declined, the average median deal size nearly doubled to about USD 1.4 million in 2025, from roughly USD 700,000 in 2024, signalling greater investor selectivity and maturity.
India's technology startups raised USD 10.5 billion in 2025, down 17 per cent from USD 12.7 billion in 2024 and 4 per cent from USD 11 billion in 2023, according to Tracxn. The number of USD 100 million-plus funding rounds fell to 14, compared with 19 in 2024, though large deals included Erisha E Mobility (USD 1 billion), Zepto (USD 450 million) and GreenLine (USD 275 million).
Despite lower funding, liquidity events surged, led by a rebound in startup IPOs. As many as 18 startups, including Lenskart, Groww, Meesho and PhysicsWallah, listed on Indian exchanges, collectively raising over Rs 41,000 crore (around USD 4.5 billion), compared with Rs 29,000 crore (around USD 3.2 billion) in 2024. "2025, I would say, was the year of liquidity. It was a year of blockbuster IPOs. It was the year which saw the record number of VC and PE-backed companies hitting the Dalal Street. That was a record year for that. For instance, if you look at a fund like Peak XV, Elevation, there were multiple IPOs that they had in the portfolio," Tracxn Co-Founder Neha Singh told PTI.
Some listings delivered strong gains, with Urban Company debuting at a 58.26 per cent premium and Meesho at 53 per cent, while others, including Lenskart and BlueStone, saw more muted market responses, underscoring stricter public-market discipline. Retail, fintech, transportation, logistics and quick commerce emerged as the strongest-performing sectors in a year marked by global tariff disruptions and geopolitical tensions. Enterprise applications (USD 2.6 billion), retail (USD 2.4 billion) and fintech (USD 2.2 billion) continued to anchor funding, while new unicorns included Netradyne, Porter and Drools.
India now hosts the world's third-largest startup ecosystem, projected to grow 12-15 per cent annually, according to industry estimates. "India's startup story is one of remarkable domestic growth. With around 200,000 DPIIT-recognised startups, 44,000 added this year alone, 11 new unicorns, and 18 public listings raising over Rs 41,000 crore, India is now the world's third-largest startup ecosystem after the US and China," Prashant Singhal, Markets and Telecommunications Leader at EY India, said.
While traditional powerhouses like Enterprise Applications (USD 2.6 billion), Retail (USD 2.4 billion), and Fintech (USD 2.2 billion) continued to anchor capital raises, 2025 saw the rise of strategic dark horses. Notable entries in the unicorn club included Netradyne (AI/Logistics), Porter (Logistics), and Drools (Pet Care). Another defining trend of 2025 was the "reverse flip", with startups relocating headquarters from the US and Singapore back to India ahead of domestic IPOs. Companies such as Razorpay, Meesho and Flipkart completed or initiated the move, while Zepto, Shiprocket and PhonePe remain in the pipeline.
Looking ahead, funding activity is expected to rebound in 2026, driven by capital recycling following exits, new fund launches and growing LP interest. Artificial intelligence and consumer-focused businesses, including D2C brands, are expected to remain key investment themes as the ecosystem enters its next phase of disciplined expansion. Funding in 2026 is expected to be higher than in 2025. This is driven by a significant number of exits seen by funds in 2025, which will likely lead to reinvestment in the ecosystem, according to Singh.
There is an expectation of many new funds being launched as individuals leave large established firms to start their own. Limited Partners (LPs) are also reportedly "fairly excited" about investing in the Indian market. Artificial Intelligence will remain a major theme for investment and development, while the broader consumer market, including D2C brands and services, is an overarching theme that investors remain excited about for 2026.
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