Startup Funding Likely To Revive During 2025

Risk capital will be more active if the US economy recovers in 2025. In the last 2 years, global funding into startups had dried up. Such funding winter seen in Indian startup ecosystem, is likely to give way to more funding in 2025

Bengaluru: Startup funding in 2025 is likely to see an uptick with more early stage funding as green shoots emerged in the overall fund raising space towards the end of 2024.

According to sources in the know, growth recovery in the US economy under next US administration under Donald Trump can spur flow of risk capital into startups across the world, which in turn will help Indian startup ecosystem.

“Risk capital will be more active if the US economy recovers in 2025. In the last two years, global funding into startups had dried up. Such funding winter seen in Indian startup ecosystem, is likely to give way to more funding in 2025,” said a fund manager.

Green shoots in the overall funding environment have already been visible in the second half of 2024.

In terms of venture capital funding, Indian startups have seen 53 per cent rise in funding during the first eight months of the year. From January to August 2024, Indian startups raised $7.5 billion, compared with $4.9 billion in the same period last year. In terms of number of deals, it also showed an increase. 780 venture capital deals were made during this period of 2024 as compared to 742 in 2023.

Some of the largest funding rounds in 2024 include Zepto’s $665 million, Meesho’s $300 million, and PharmEasy’s $216 million. Meanwhile, the country also saw addition of some new unicorns in 2024, including Ather, Rapido, and Moneyview.

Not only funding, several startups also hit the public market last year, making successful debut in Indian bourses.

More than dozen startups raised funds from public through IPO in 2024. Awfis, the provider of coworking space space, raised Rs598.9 crore and listed on the bourses at 12.8 per cent premium over its issue price. Similarly, online marketplace for kids’ products, FirstCry has raised Rs4,194 crore through its public offer and entered the bourses at a 34.4 per cent premium to its issue price. Food aggregator Swiggy, raised Rs11,324 crore and had a strong debut in listing. Another major company, Ola Electric raised Rs6,145 crore during this year.

Sources in the know said that early stage funding is likely to see an uptick in 2025, which was not the case in 2024. Overall funding in the technology startups is expected to see an uptick after two years of lull.