Karnataka tech ecosystem raises $3.8 billion in 2025 as early-stage funding gains momentum: Tracxn
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Karnataka-based tech companies raised $3.8 billion in funding in 2025, marking a moderation from the elevated levels seen in the previous two years, according to insights released by market intelligence platform Tracxn. The funding figure represents a 28% decline from the $5.4 billion raised in 2024 and a 23% drop from the $5.0 billion raised in 2023, largely due to a sharp slowdown in late-stage investments.
Despite the overall decline, funding trends varied significantly across stages. Early-stage startups emerged as a bright spot while late-stage capital deployment witnessed a pronounced contraction. Seed-stage companies in Karnataka raised $434 million in 2025, down 17% from $520 million in 2024, and 8% lower than the $472 million raised in 2023.
Early-stage funding
Early-stage funding, however, saw strong growth, with startups raising $1.6 billion during the year. This marked a 32% increase over the $1.2 billion raised in 2024 and a 37% rise compared to $1.1 billion in 2023. In contrast, late-stage funding fell sharply to $1.8 billion in 2025, a 50% decline from $3.6 billion in 2024 and a 46% drop from $3.4 billion in 2023.
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Enterprise applications, fintech, and retail emerged as the top-performing sectors in 2025. Enterprise applications attracted $1.1 billion in funding, largely in line with 2024 levels but 11% lower than in 2023. Fintech funding rose 47% year-on-year to $1.0 billion, though it remained 13% below 2023 levels. Retail tech startups raised $920 million, a steep decline from $1.4 billion in 2024 and $1.9 billion in 2023.
Large-ticket deals
Large-ticket deals were fewer, with just three $100 million-plus funding rounds in 2025, compared with nine such rounds in both 2024 and 2023. Zepto, Groww, and Jumbotail were among the major fundraisers, with Zepto securing $300 million, Groww raising $202 million, and Jumbotail garnering $120 million.
3 unicorns in 2025
The ecosystem added three unicorns in 2025, down from five in 2024 but up from one in 2023. Public market activity picked up, with nine IPOs during the year, including those of Groww, Meesho, and Ather Energy.
Exit activity remained steady, with 46 acquisitions recorded in 2025. Groww’s $150 million acquisition of Fisdom was the largest deal of the year. Bengaluru-based startups accounted for nearly all funding raised in Karnataka, underscoring the city’s dominance in the state’s tech ecosystem.