Government perspective: scale and relative success
On December 14, 2022, Union Minister of Commerce and Industry Piyush Goyal informed the Lok Sabha that startups naturally face high failure rates, but emphasized that India’s success rate is “relatively higher than the rest of the world.” By the end of November 2022, India had 84,012 officially recognized startups, he noted.
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Commemorating ten years of Startup India on January 16, Goyal highlighted that the ecosystem has achieved a significant milestone, with over 2 lakh DPIIT-recognized startups and more than 50 new startups being acknowledged daily. These startups have created over 21 lakh jobs, positioning India as the third-largest startup ecosystem globally, backed by cumulative funding of ₹15 lakh crore. He credited the growth to policy reforms aimed at minimizing bureaucratic obstacles and fostering innovation and scalability.
Debate on failure and a reality check
Despite the growth, worries regarding failure rates linger. A 2017 IBM-sponsored study revealed that almost 90% of Indian startups fail within the first five years. Experts assert that while some startups had limited survival potential, many failed due to unique circumstances or inadequate risk management, even though they had viable business models and solid technology.
This discrepancy between significant growth and high failure rates continues to fuel discussions on the ecosystem’s overall maturity.
Funding trends: A cautious approach to capital
According to data from Tracxn, Indian startups secured $11.2 billion in funding in 2025, representing an 11.1% decrease from $12.6 billion in 2024. This moderation is attributed to global economic uncertainties, tighter liquidity, and an intensified focus from investors on capital efficiency and profitability. Larger funding rounds have become more selective, with capital increasingly directed toward sectors that provide clearer long-term visibility.
However, specific segments saw considerable growth. Funding in aerospace, maritime, and defence tech rose by 80% in 2025 compared to the previous year, followed by real estate and construction tech at 76.8% and environment tech at 53.5%. Tracxn ascribed this to increased government spending, strategic importance, sustainability objectives, and regulatory initiatives for decarbonization.
Neha Singh, Co-founder of Tracxn, stated, “Capital is increasingly flowing into sectors with clearer policy tailwinds, longer investment horizons, and enterprise or infrastructure-led demand, while consumer-heavy and platform-driven sectors are undergoing adjustments. This shift reflects a maturing ecosystem where growth is becoming less widespread and more concentrated in areas with expected long-term viability and strategic relevance.”
From seed to Series A: A narrowing funnel
Tracxn data also highlights the rigorous filtering process that startups encounter as they scale. Out of 8,996 companies that secured seed-stage funding, only 2,483 advanced to Series A or Series B rounds, reflecting a progression rate of about 27.6%. Key factors influencing this progression include product-market fit, early revenue traction, and the ability to display scalable unit economics, as investors are becoming more disciplined in follow-on funding choices.
Technology startups and their global standing
In terms of global rankings, India secured third place in total startup funding in 2025, following the US and the UK, and surpassing China, Germany, and France. Experts suggest that this reflects resilience rather than mere hyper-growth. While consumer internet and e-commerce players continue to attract capital selectively, the funding trend is increasingly shifting towards enterprise technology, fintech, climate-related sectors, logistics, and infrastructure-oriented businesses.
This trend also relates to last year’s discussion sparked by Piyush Goyal’s call for a greater focus on deeptech and innovation-driven startups, rather than an over-dependence on consumer platforms.
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Founders’ perspective: Profitability and a Bharat focus
CarDekho Group co-founder and CEO Amit Jain noted that the ecosystem is shifting towards first-principles thinking, with startups increasingly focusing on profitability and sustainable growth. He identified robust momentum in mobility, emerging technologies, AI, deeptech, SaaS, and fintech, mentioning that India now hosts around 30,000 tech startups.
Jain further emphasized that entrepreneurship is flourishing beyond metropolitan areas, with a notable proportion of startups emerging from Tier 2 and Tier 3 cities, supported by incubation centers, accelerators, and enhanced visibility through platforms like Shark Tank.
Investor viewpoint: Diversification and discipline
Rukam Capital founder and managing partner Archana Jahagirdar remarked that India’s startup expansion is now much more diversified compared to a decade ago when capital was largely focused on consumer internet and fintech. While these sectors continue to grow, SaaS, enterprise tech, healthtech, and climate tech are arising as robust growth areas.
She pointed out the shifting consumption patterns in non-metro India, where discovery is increasingly video-centric and research-based, prompting startups to prioritize affordability, vernacular adoption, and offline distribution. Jahagirdar noted that the ecosystem is distinctly transitioning from “growth at all costs” to capital-efficient, problem-oriented businesses with clearer routes to profitability.
As Manas Pal, Co-founder of PedalStart, put it, “The ecosystem is no longer about experiments. It is focused on building serious companies that can endure market cycles and generate tangible economic value.”
Deeptech and long-term investments
GrowX Ventures general partner Manish Gupta stated that while technology startups maintain a quicker growth pace than traditional sectors, capital is now pursuing technological depth, defensibility, and long-term relevance, rather than just scale. He highlighted a growing interest in AI infrastructure, deeptech, spacetech, and advanced manufacturing, even though these sectors require more time to establish.
NSRCEL CEO Anand Sri Ganesh echoed this sentiment, noting a rising interest in tech-integrated business models within robotics, drone technology, biotech, and life sciences. He mentioned that founder mindsets are evolving, focusing more on governance, unit economics, and sustainable scaling, while investors are adopting a more cautious and deliberate approach in their engagements.
A decade later
Ten years following the launch of Startup India, the ecosystem finds itself at a pivotal point. While the bold statistics indicate scale and global significance, funding trends and expert insights reveal a period of recalibration—where growth is more deliberate, selective, and aligned with long-term resilience rather than mere swift expansion.
