Deeptech Enters Top Sector Ladder in 2025, While Fintech & Ecommerce Continue to Dominate Startup Funding

Introduction

The Indian startup ecosystem witnessed a compelling sectoral shift in 2025 as investment patterns evolved alongside broader economic headwinds. Despite an overall 8 % year-on-year drop in total funding, reaching around $11 billion across 936 deals, investor preferences remained concentrated in high-growth sectors — particularly fintech and ecommerce — even as deeptech rose sharply up the rankings to become the third most funded category by deal count.

According to Inc42’s Annual Indian Startup Trends Report 2025, while fintech and ecommerce retained their leadership roles, deeptech’s rise from a lower base marks an important deviation in investor behaviour, highlighting a diversification of capital flows into innovation-intensive and long-horizon technologies.

The State of Startup Funding in India in 2025

Overall Funding Trends

In 2025, the Indian startup ecosystem continued to reflect maturity and selective investor confidence, even amid contraction in overall capital deployment:

• Total funding for Indian startups declined by 8 % compared to 2024, amounting to approximately $11 billion.
• The total deal count for the year stayed robust at 936+ deals, indicating sustained activity despite funding moderation.
• The startup landscape also experienced a significant IPO wave, with multiple late-stage exits and public listings, alongside some company closures — reflecting both maturation and consolidation pressures in the market.

Within this broader context, sectoral leadership remained concentrated around fintech and ecommerce, but emerging segments — especially deeptech — began attracting notable attention.

Fintech and Ecommerce: The Leading Sectors

Fintech

The fintech sector remained a strategic priority for investors throughout 2025, anchoring India’s startup funding landscape:

• Fintech startups collectively raised $2.5 billion across 120 deals during the year — the highest amount among all sectors.
• Notwithstanding a 26 % drop in deal count compared to 2024, the capital concentration shifted toward later-stage investments, with growth-stage financing rising sharply.
• India also emerged as one of the top global fintech funding destinations, ranking third worldwide for total fintech investment, trailing only the United States and the United Kingdom.

Notable large rounds included unicorn-level investments in names such as Zolve and Groww, contributing substantially to the overall fintech investment tally.

The fintech ecosystem’s continued resilience — even amid funding moderation — underscores investor confidence in digital payments, lending, insuretech, and financial infrastructure as sectors poised for long-term disruption.

Ecommerce

While fintech led in total capital raised, ecommerce dominated the battlefield in terms of deal count:

The ecommerce segment recorded 206 deals in 2025 — more than any other category — raising about $1.7 billion in funding.

The high deal count reflects broad investor interest across early and mid-stage ecommerce startups, driven by scalable business models and expanding consumer markets.

With over 480 million ecommerce users in India, including 192 million urban customers, the sector’s fundamentals remain compelling for both domestic and global investors.

Ecommerce’s leadership in sheer transaction volume reinforces its role as a structural backbone of India’s digital economy, particularly in consumer goods, direct-to-consumer brands, and integrated marketplaces.

Deeptech’s Rise: A Silver Lining in 2025

Although fintech and ecommerce continued to draw the lion’s share of capital, deeptech emerged as a key growth sector in 2025, rising up the ladder of investor focus and deal activity.

What Is Deeptech?

Deeptech refers to startups that build solutions based on hard science and advanced engineering, often involving sectors such as:

• Artificial intelligence and machine learning algorithms
• Robotics and autonomous systems
• Advanced materials and semiconductors
• Space and aerospace technologies
• Biotech and medical devices
• Clean energy technologies
  These startups typically require longer development timelines, higher initial capital, and patient investment compared to consumer-oriented tech models.

Deeptech Funding Trends in 2025

In 2025:

• Deeptech recorded 87 funding deals, making it the third most active sector by deal count after fintech and ecommerce.
• Total funding for deeptech startups was approximately $500 million — lower in absolute terms than the leading sectors, but notable given the higher capital intensity and longer time-to-market of deeptech ventures.

The increased deal activity signals a growing investor willingness to look beyond near-term monetisation toward foundational capabilities that could drive systemic economic and technological growth over the next decade.

Drivers of Deeptech Momentum

Several factors contributed to deeptech’s rising profile in 2025:

1. Launch of Specialized Funds
   Venture capital firms such as Speciale Invest, 888VC, Riceberg Ventures and Chiratae Ventures launched funds with explicit deeptech mandates, enabling capital flows tailored to the sector’s unique dynamics.
2. Formation of Strategic Alliances
   The creation of the India Deep Tech Alliance (IDTA) — backed by several prominent investors — aims to channel over $1 billion into deeptech startups over the next decade, demonstrating long-term commitment and strategic alignment.
3. Government Support
   Public policy initiatives such as the Research Development and Innovation (RDI) scheme with a corpus of INR 1 lakh crore were approved to catalyze innovation, highlighting policy recognition of deeptech’s strategic significance.
4. Investor Recognition of Strategic Value
   Deeptech’s inherent focus on hard problems like autonomous systems, AI at scale, advanced computing, and material science aligns with national competitiveness and industrial innovation, attracting institutional interest despite initial risk and longer horizons.

While deeptech fundraising remains smaller in aggregate monetary terms than fintech and ecommerce, its rise in deal count reflects a shift where investment conversation is broadening into foundational technology sectors with breakthrough potential.

Funding Patterns Across Startup Stages

The 2025 funding landscape also showed distinct patterns by startup maturity level:

• Early-stage funding declined modestly in overall volume but remained active across sectors, particularly where niche technology solutions and product-market fit were emerging.
• Growth-stage funding showed resilience, particularly in fintech and select enterprise tech categories, increasing to about $4 billion — up 14 % from the previous year.
• Late-stage funding experienced a drop as investors shifted priorities toward strategic IPO exits and disciplined capital deployment, reflecting a more cautious macroeconomic stance in the broader Indian startup economy.

These patterns indicate that while capital may be more selective, growth and scalability continue to command investor confidence, especially where startups demonstrate clear product differentiation and revenue traction.

Ecosystem Maturity and Strategic Outcomes

The 2025 snapshot of India’s startup funding landscape offers a nuanced view of ecosystem maturation:

• IPO activity and exits increased, underscoring growth in later-stage value realisation.
• Investor segmentation became more pronounced, with growth and enterprise segments gaining relative share over early speculative rounds.
• Sector diversification beyond the traditional favorites (fintech and ecommerce) toward deeptech and enterprise tech suggests an evolving understanding of long-term innovation priorities.

Together, these trends signal that the Indian ecosystem is not only adapting to funding headwinds but also broadening its strategic canvas to include high-impact technology sectors that may shape global competitiveness in the long run.

Conclusion

In 2025, fintech and ecommerce reinforced their positions as the backbone of investor activity in India’s startup ecosystem, consistently drawing the largest capital proportions and highest deal involvement.

However, the rise of deeptech — manifest in its ascent into the top sector ladder by deal count — points to a maturing investment philosophy that recognises the importance of deep innovation and long-term technological value creation.

As deeptech continues to attract specialised funds, strategic alliances, and supportive public policy, 2026 and beyond may see this sector grow not just in deal count, but in strategic importance for India’s global tech leadership — complementing the established engines of fintech and ecommerce.

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