In a remarkable display of resilience, India's tech startup ecosystem has solidified its position as the third-largest globally in terms of funding, as per the latest report from market intelligence firm Tracxn. This achievement comes despite a notable slowdown in overall investment in the first half of 2025, underscoring the enduring confidence of investors in the country's innovation landscape.

According to Tracxn's "India Tech Semi-Annual Funding Report H1 2025," Indian tech startups collectively raised $4.8 billion in the first six months of the year. While this figure represents a 25% decline from the $6.4 billion secured in H1 2024 and a 19% drop from $5.9 billion in H2 2024, India has successfully outpaced competitors like Germany and Israel, trailing only the United States and the United Kingdom in global rankings.

Neha Singh, Co-Founder of Tracxn, emphasized the maturity and robustness of the Indian tech ecosystem. "While the funding volumes have come down compared to the previous year, India's tech ecosystem continues to show resilience and maturity," she stated. "Strong interest in sectors like transportation, retail, and enterprise tech signals investor conviction in solving large, structural challenges."

The report highlights that the slowdown was broadly distributed across all funding stages. Seed-stage funding saw a significant drop to $452 million, nearly half of what it was a year ago. Early-stage startups attracted $1.6 billion, and late-stage companies raised $2.7 billion, both experiencing double-digit declines. The number of "mega-deals" (funding rounds exceeding $100 million) also decreased, with only five such deals recorded in H1 2025, compared to nine in H2 2024 and ten in H1 2024.

Despite these challenges, several companies managed to secure substantial investments. Notable deals included Erisha E Mobility's impressive $1 billion Series D round, GreenLine's $275 million Series A, and Infra.Market's $222 million Series F. Spinny and Darwinbox were also among the significant fundraisers.

Sector-wise, Transportation and Logistics Tech emerged as a standout performer, attracting $1.6 billion in funding – a remarkable 104% increase from H2 2024. The retail sector also showed signs of recovery, securing $1.2 billion, while enterprise applications brought in $1.1 billion.

The report also noted a slowdown in public market activity, with 12 Indian startups going public in H1 2025, down from 21 in the same period last year. Only two new unicorns emerged, compared to three in H1 2024, reflecting a more cautious capital environment.

However, mergers and acquisitions (M&A) witnessed a significant surge, with 73 transactions recorded in the first half of 2025, up from 54 in H1 2024. This indicates a growing trend of consolidation and strategic exits within the ecosystem. Major acquisitions included DS Group and Patanjali Ayurved's $516 million takeover of Magma General Insurance, and HUL's $350 million acquisition of skincare brand Minimalist.

Geographically, Bengaluru maintained its dominance as India's leading startup hub, accounting for 26% of the total funding. Delhi followed closely, contributing 25%. LetsVenture, AngelList, and Accel were identified as the most active investors across all stages.

The Tracxn report paints a picture of a maturing Indian tech startup ecosystem that, despite facing global economic headwinds and a decline in funding volumes, continues to attract significant investor interest and demonstrate its capacity for innovation and value creation on the global stage.