India’s startup ecosystem bounced back strongly in Q1 2025, with total funding up 61% year on year to $4.18 billion from $2.6 billion in Q1 2024. The deal volume rose to 338, marking a 16.5% increase over the year-ago period, according to the latest report by DealStreetAsia – DATA VANTAGE.
While funding remained flat quarter-on-quarter, deal volume rose 12.3%, according to the India Deal Review: Q1 2025.
The software industry led the funding charts, with total proceeds worth $948.3 million from 45 deals in Q1 2025. Software startups had raised $327.3 million from 49 deals in the previous quarter. Impetus Technologies led with a $350-million funding followed by Darwinbox, which raised $140 million co-led by global investment firms Partners Group and KKR.
Financial services followed with $883.9 million, driven by Zolve ($251 million), Leap Finance ($100 million), and ToneTag ($78 million). Healthcare IT came third, largely due to Innovaccer’s $275-million raise. The only other deal in the space was BrainSight AI.
Together, the top three industries—software, financial services, and healthcare IT—raised $2.1 billion, or 50% of the total deal value in Q1.
Megadeals—those exceeding $100 million—grew sharply year on year to $1.34 billion across seven deals, up from just three deals worth $323 million in Q1 2024. The share of megadeals in the total funding value for Q1 2025 also surged to nearly 32%, from just 12% in the first quarter of 2024.
However, megadeal value dropped nearly 30% QoQ from $1.9 billion in Q4 2024. January was the standout month with four megadeals worth $846 million, February had none, and March saw three deals totalling $491 million.
By stage, growth-stage funding dropped 16% QoQ to $2.34 billion amid fewer megadeals. Seed and pre-seed funding rose 11% to $173.4 million across 106 deals; MicroMitti led with $10.3 million. Series A and pre-Series A funding fell to $319.2 million, while debt funding more than doubled to $341 million.
Geographically, Bengaluru dominated with $1.46 billion across 101 deals, followed by Mumbai ($536.3 million) and Gurugram ($510.2 million). Indore rose to fourth place, while Delhi slipped to seventh.
Venture capital firm Accel was the most active investor with 13 deals. The firm co-led investments in nine startups including Apna Mart, Bridgetown Research, Sarla Aviation, Nabhdrishti Aerospace, BPR Hub, CHK, Truemeds, Scimplify, and Captain Fresh.
Blume Ventures, Venture Catalysts (100Unicorns), and Peak XV Partners followed with eight investments each. Inflection Point Ventures made seven investments.
“The outlook for Indian startup funding over the next 12-18 months remains very positive. After a period of volatility, 2024 saw a strong rebound in funding activity, driven by renewed investor confidence and a maturing ecosystem. Looking ahead, 2025 is poised to be a landmark year for Indian startups. The ecosystem is benefitting from India’s strong economic fundamentals, a growing pipeline of innovative companies, and the rise of high-growth sectors like AI, space tech, and climate tech,” said Pratip Mazumdar, co-founder & partner, Inflexor Ventures.
The India Deal Review: Q1 2025 report offers data and insights on:
- Quarterly fundraising trends
- Top industries and verticals
- Top funding destinations
- Megadeal value and volume
- List of most active investors
