Indian startups raise $3.1b in Q1 2025 as fintech leads

Indian startups raised US$3.1 billion in funding in Q1 2025, unchanged from the previous quarter, according to Inc42’s report. During the same period, 23 new funds totaling over US$3.2 billion were launched.

The fintech sector led the way, with six funds worth US$1.18 billion and US$739 million raised across 33 deals.

The AI sector followed with five funds totaling US$1.13 billion. SaaS and consumer tech each saw four dedicated fund launches.

Investors mainly focused on early-stage startups, with 17 funds worth US$1.5 billion launched.

Debt funding gained traction, with Stride Ventures and Alteria Capital backing 27 and 26 startups, respectively.

Major fund launches included Accel India’s US$650 million fund, Bessemer and Avendus at US$350 million each, Bharat Value Fund at US$289 million, and Trifecta Capital at US$230 million.

Deeptech sectors like robotics and aerospace saw limited interest, with only three targeted funds.

🔗 Source: Inc42

🧠 Food for thought

1️⃣ India’s persistent deeptech funding gap despite ecosystem growth

India’s deeptech sector continues to face a disproportionate funding gap, with only 3 out of 23 new funds in Q1 2025 focused on deeptech despite government initiatives.

This pattern has historical roots. Deeptech funding dropped by 77% in 2023, creating what experts call a “valley of death,” particularly at Series A and beyond stages for innovative startups 1.

While India’s startup ecosystem is robust with approximately 31,000 tech startups overall, only about 3,600 are in deeptech categories, representing a small fraction of the total innovation landscape 2.

The $100 billion government fund announced in the 2025-26 Union Budget for deeptech R&D signals recognition of this gap. However, private capital remains hesitant, largely due to the longer development cycles and higher risks associated with deeptech ventures 2.

This funding disparity explains why many promising deeptech founders continue seeking international investors rather than relying on domestic funding sources. This may limit India’s ability to develop homegrown solutions for complex technological challenges.