40% drop in tech start-up funding in Karnataka in first 9 minths of 2025: Report

According to the 9M 2025 Karnataka Technology Ecosystem Report published by market research firm Tracxn, tech startups in Karnataka raised a total of $2.7 billion in the first nine months of calendar year 2025 (9M 2025); this is a 40% decrease compared to the corresponding period in 2024.

According to the report, there was a noticeable slowdown in big ticket tours during this period, which affected the overall flow of capital into the ecosystem. Bengaluru-based tech firms contributed almost all the funds raised by tech companies in Karnataka.

Strong progress at early stage, selective inclusion later

There was also a 23% decrease in financing figures compared to the same period in 2023. While the figures were $4.5 billion in 9M 2024, they increased by $3.5 billion in 9M 2023.

Seed-stage financing totaled $287 million; This represents a decrease of 22% from $366 million in 9M 2024 and a decrease of 21% from $361 million in 9M 2023.

On a more positive note

On a more positive note, early-stage investments showed strong progress, reaching $1.1 billion; This is a 20% increase compared to $914 million in 9M 2024 and a 26% increase compared to $871 million in 9M 2023. This underscores growing investor confidence in emerging companies, according to the report.

However, towards the mature end of the market, signs of more selective participation began to appear. Late-stage financing reached $1.3 billion, down 59% from $3.2 billion in 9M 2024 and down 41% from $2.2 billion in 9M 2023.

Best performing sectors

FinTech, Enterprise Applications and Retail were the best performing sectors in Karnataka during this period.

The FinTech sector recorded $841 million in funding, up 38% compared to $608 million in 9M 2024, but down 21% compared to $1.1 billion in 9M 2023.

The Enterprise Applications sector saw $830 million in 9M 2025; This represents a 19% decrease from $1.0 billion in 9M 2024 and a 26% decrease from $1.1 billion in 9M 2023.

The retail sector recorded $730 million in 9M 2025, down 43% from $1.3 billion in 9M 2024, but up 10% compared to $663 million in 9M 2023.

IPOs and unicorns

The period recorded two financing rounds over $100 million, including $202 million in Groww’s series F round and $120 million in Jumbotail’s series D round, compared to eight rounds in 9M 2024 and seven rounds in 9M 2023.

During this period, Ather Energy and BlueStone went public. However, the two IPOs the state’s tech ecosystem saw marked a 67% decline from the six IPOs in 9M 2024. Three new unicorns appeared during the period; This represents a 40% decrease from five in 9M 2024 and a 200% increase compared to one unicorn in 9M 2023.

Technology companies in Karnataka made 35 acquisitions in the 9th month of 2025. The highest value acquisition was Groww’s acquisition of Fisdom for $150 million, followed by ICRA’s acquisition of Fintellix for $26 million.