Initial public offerings (IPOs) were a defining theme for the Indian startup ecosystem in 2025, with 18 startups making their public market debuts. While these 18 startups raised about INR 20K Cr through fresh issue of shares, their investors like Peak XV, Tiger Global, Y Combinator, among others, minted hefty returns on their bets on startups like Groww, Meesho and Lenskart.

Amid all these, the private fund infusion in the Indian startup ecosystem stabilised in 2025. According to Inc42’s “Annual Indian Startup Trends Report, 2025”, Indian Startups cumulatively raised $11 Bn across 936 deals during the year. While this figure represents an 8% decline from the $12 Bn raised across 993 deals in 2024, it needs to be viewed alongside the IPO spring. For context, Indian startup funding stood at $10 Bn in 2023 amid the funding winter.

However, private funding numbers are still a far cry from the $42 Bn raised across 1,584 deals in 2021. It is also less than half of the $25 Bn raised across 1,517 deals in 2022. It is pertinent to mention that investors, in the past, have described 2021 and 2022 as aberrations, adding that the funding activity seen after the peak years represents the new normal.

According to YourNest Venture Capital’s venture partner Ranjeet Shetye, total funding remained steady but disciplined this year. “What changed was the quality of capital. Domestic funds, family offices, and corporate investors played a much larger role this year,” he noted.

The thesis that the Indian startup funding ecosystem has entered a structurally different phase in 2025, moving beyond the era where scale narratives and population-led opportunity alone could unlock capital, is echoed throughout the industry.

The overall funding volumes appear muted compared to peak years, as investors have become much more selective. This shift is being supported by a maturing entrepreneurial ecosystem, rather than cyclical capital flows alone. Improved internet access, wider distribution of technical talent beyond metros, better institutional education and the rise of structured incubators and research-linked centres across India have expanded the pipeline of investable founders and ideas.

“The funding ecosystem itself is growing. Every wealthy individual now has a ‘family........

© Inc42