India's startup ecosystem raised nearly $11 billion in 2025, with investors becoming more selective and focusing on early-stage startups that demonstrate strong product-market fit and revenue visibility. The number of funding rounds decreased by 39%, while total funding fell by 17%, highlighting a shift towards more deliberate capital deployment. AI startups in India raised $643 million, mainly in early-stage deals, contrasting with the U.S.'s $121 billion AI funding surge. The Indian government increased its involvement, launching initiatives to support deep-tech and innovation, which helped stabilize the regulatory environment and improve exit opportunities. This evolving landscape suggests a maturing ecosystem, with India increasingly seen as a complementary market to developed economies, offering unique opportunities and challenges. This matters because it highlights the strategic shifts in India's startup funding landscape, emphasizing the growing importance of early-stage investments and government involvement in fostering a sustainable and innovative ecosystem.
