India's tech startups in deep freeze

India’s tech startup funding hits an eight-year low. A dip in investors and shrinking capital stall the country’s unicorn engine

Jan 07, 2026, 11:20 IST1 min

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India’s technology startup ecosystem is facing its worst funding drought in eight years, with inflows declining to $10.5 billion through mid-December 2025, marking a dramatic 17 percent drop from the previous year’s $12.7 billion

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Mega deals dominate as share of the ten largest deals in total funding each year has risen from 23.9 percent in 2021 to 28.3 percent in 2025

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India’s traditional startup capital, Bengaluru, is losing ground as Mumbai and Delhi capture an increasingly larger slice of the national tech funding pie

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The pullback in investor participation is significant—the total number of unique institutional investors has dwindled from 1,862 in 2021 to 834 in 2025. First time investors represented only 17 percent of the investor pool in 2025, down from 51 percent in 2021

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Heightened risk aversion among international institutional investors led to a 68 percent drop in their participation since 2021

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A scarcity of international investors, combined with a significant reduction in average funding rounds, has led to a sharp contraction in India’s unicorn creation

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Indian tech startups face a steeper climb to billion-dollar valuations; average funding prior to a unicorn round has plummeted by 32 percent, significantly outpacing the 27 percent global decline