Notably, India is just behind the US and the UK in startup ecosystem ranking. However, in a notable shift, Delhi has surpassed Bengaluru in total funding for the quarter, marking a key change in the country’s startup landscape.
India has ranked third in the startup ecosystem in the world, according to Tracxn’s latest report. The report stated that India’s startup ecosystem continued its growth trajectory in the first quarter of 2025 by securing $2.5 billion in funding. Notably, India is just behind the US and the UK ranking in the startup ecosystem. However, in a notable shift, Delhi has surpassed Bengaluru in total funding for the quarter, marking a key change in the country’s startup landscape.
Even as Bengaluru recorded a higher number of deals, Delhi’s funding dominance was largely driven by strong IPO exits. Several Delhi-based tech firms have accounted for 40% of all funding seen by tech companies across India. Delhi was followed by Bengaluru, accounting for 21.64%.
“India has become one of the largest ecosystems in terms of startup activity as well as funding activity,” Neha Singh, Co-Founder of Tracxn, was quoted as saying by MoneyControl.
He said that even if you look at the number of unicorn companies or late-stage companies valued at over a billion dollars, India is now the third-largest startup ecosystem.
Tracxn’s latest report hinted that the late-stage funding saw a surge, while early-stage investments declined.
Co-Founder of Tracxn attributed this to the strong pipeline of IPO-ready companies following a buoyant IPO market in 2024.
He said that several venture-backed companies went public last year, providing strong success stories, and as a result, we now have a strong pipeline of mature companies looking to enter the IPO market.
The report further stated that AI funding in India has primarily focused on applications rather than infrastructure, and the quick commerce sector has grown with the success of Blinkit, Zepto, and Swiggy Instamart.
Moreover, the report highlighted a sharp increase in mergers and acquisitions, with Q1 witnessing 38 deals, marking a 41% rise year-on-year.
