Karnataka startups funding in Q1 2025 drops to $633M: Tracxn
The Karnataka Tech Quarterly Funding report found that sectors including enterprise applications, fintech, and retail contributed the most to the capital pool.
Karnataka startups raised a total of $633 million in funding in the first quarter of 2025, around half of the $1.20 billion they secured in the same quarter of last year.
Startups in the state raised $825.5 million in Q4 2024, Tracxn’s Karnataka Tech Quarterly Funding report for Q1 2025 finds.
The report found that there was a substantial contraction in funding activity, both quarter-over-quarter and year-over-year, and a complete absence of unicorns or funding rounds over $100 million.
Despite the downturn, sectors including enterprise applications with $298.6 million, fintech with $221.1 million, and retail with $219.8 million, contributed the most to the overall capital raised, the report noted.
It also stated that no unicorns were created in Q1 2025 and Q4 2024, compared to two unicorns in Q1 2024. There were three new additions to the Soonicorn club.
As per the report, the seed stage saw $57.3 million in Q1 2025, dropping 14% from $66.6 million raised in Q4 2024, and 55% from $128 million in Q1 2024.
Meanwhile, the early stage saw $294 million in funding in Q1 2025, an increase of 34% from $220 million in Q4 2024, and a drop of 14% from $344 million raised in Q1 2024.
Late Stage witnessed total funding of $282M in Q1 2025, with a 48% drop compared to the $539 million raised in Q4 2024, and a drop of 60% from $707 million raised in Q1 2024.
The highest-valued acquisition of the quarter was of Axio by Amazon at $150 million, followed by the acquisition of Digiledge by Mintoak at $3.50 million. 21 tech companies from Karnataka were acquired as opposed to 11 in the first and fourth quarters of 2024.
Bengaluru-based tech firms accounted for more than 99% of all funding seen by tech companies across Karnataka, followed by Hubli at a distant second.
According to the report, Accel, Blume Ventures, and Sequoia Capital were the overall top investors in the Karnataka tech ecosystem.
Edited by Affirunisa Kankudti