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The tech startups in Karnataka raised a total of $2.7 billion in the first nine months of calendar year 2025 (9M 2025), a 40% drop compared to the corresponding period in 2024, as per the Karnataka Tech Ecosystem Report for 9M 2025 released by market research firm Tracxn.
According to the report, the period witnessed a noticeable slowdown in large-ticket rounds, impacting overall capital flow into the ecosystem. Bengaluru-based tech firms contributed nearly all of the funding raised by tech companies across Karnataka.
Strong progress in early stage, selective participation later
The funding figures also saw a 23% decline compared to the corresponding period in 2023. While the numbers stood at $4.5 billion in 9M 2024, $3.5B was raised in 9M 2023.
Seed-stage funding stood at $287 million, representing a 22% decline from $366 million in 9M 2024 and a 21% decrease from $361 million in 9M 2023.
A more positive note
On a more positive note, early-stage investment showed strong progress, reaching $1.1 billion, a 20% increase compared to $914 million in 9M 2024, and a 26% rise from $871 million in 9M 2023. According to the report, this highlighted growing investor confidence in emerging companies.
Towards the mature end of the market, however, signs of more selective participation were seen. Late-stage funding totaled $1.3 billion, a 59% decrease from $3.2 billion in 9M 2024 and a 41% decline compared to $2.2 billion in 9M 2023.
Top performing sectors
FinTech, Enterprise Applications, and Retail were the top-performing sectors in Karnataka during the period.
The FinTech sector recorded $841 million in funding, an increase of 38% compared to $608 million in 9M 2024, but a decrease of 21% compared to $1.1 billion in 9M 2023.
The Enterprise Applications sector saw $830 million in 9M 2025, representing a 19% decrease from $1.0 billion in 9M 2024, and a 26% decline compared to $1.1 billion in 9M 2023.
The Retail sector recorded $730 million in 9M 2025, a 43% drop from $1.3 billion in 9M 2024, but a 10% increase compared to $663 million raised in 9M 2023.
IPOs and unicorns
The period registered two funding rounds above $100 million – $202 million by Groww in a series F round and $120 million by Jumbotail in a series D round – compared to eight such rounds in 9M 2024 and seven in 9M 2023.
Ather Energy and BlueStone went public during the period. However, two IPOs that the State’s tech ecosystem saw marked a 67% drop from six in 9M 2024. Three new unicorns emerged during the period, representing a 40% drop from five in 9M 2024, and a 200% rise compared to one in 9M 2023.
Tech companies in Karnataka saw 35 acquisitions in 9M 2025. The highest-valued acquisition was Groww acquiring Fisdom for $150 million, followed by ICRA acquiring Fintellix for $26 million.
Published – November 26, 2025 11:55 am IST
