The Indian startup ecosystem marked a clear shift in 2025, from survival to consolidation. After two years of capital tightening, the narrative moved decisively towards liquidity, scale, and strategic alignment with national priorities.

The year saw Indian startups operate in a far more disciplined environment. Growth was no longer pursued at any cost, valuations corrected to more realistic levels, and investors prioritised business models with clearer paths to profitability and defensibility.

At the same time, emerging sectors like spacetech, defence tech, semiconductors, and GenAI gained prominence, reflecting a broader shift towards capital-intensive, IP-led innovation.

This change was mirrored in capital flows. While overall venture funding remained selective, deeptech funding hit an all-time high, and exits, particularly via IPOs, surged.

As many as 18 startups went public in 2025, raising roughly INR 21,474.30 Cr via fresh issues, delivering significant liquidity to early investors and reinforcing India’s public markets as a viable exit route for venture-backed companies.

2025 also stood out for the growing role of the state in shaping the startup ecosystem. Initiatives such as the IndiaAI Mission, the continued push under Semicon India, and defence indigenisation policies directly influenced where capital and entrepreneurial talent flowed.

Startups were no longer just building for consumers or enterprises, but increasingly for sovereign, strategic, and infrastructure-level use cases.

Despite lingering global uncertainty and cautious investor sentiment, Indian startups continued to push into new frontiers, from testing orbital-class rocket boosters and scaling defence manufacturing, to building indigenous AI models and semiconductor chips.

With these shifts in mind, here’s a closer look at the key developments and milestones that defined the Indian startup ecosystem in 2025.

18 Startups Went Public In 2025

The year saw 18 startups go public, collectively raising around NR 21,474.30 Cr through fresh share issues.

This wave included major names such as Groww, Urban Company, Lenskart, and PhysicsWallah, the latter becoming the first Indian edtech company to list on the stock market, raising INR 3,480 Cr while keeping 80% equity with the founders.

© Inc42