Karnataka-based startups raised $1.7 billion in the first half of 2025 (H1 2025), according to a report by data intelligence platform Tracxn, with Bengaluru-based companies in the lead. The funding level is down 30% from the $2.4 billion raised in the second half of 2024 (H2 2024), and 44% lower than the $3 billion raised during the same period last year (H1 2024).
The report stated that the decline highlights slower investor activity across multiple sectors.
Top performing sectors
Despite the overall slowdown, fintech, enterprise applications, and retail were resilient and the top-performing sectors in H1 2025.
Bengaluru-based tech companies accounted for the majority of funds raised in Karnataka during H1 2025.
Top investors in Karnataka’s tech scene included Accel, Angel List, and LetsVenture.
Top seed stage investors included Antler, 100X.VC, and Rainmatter. Accel, Alteria Capital, and Peak XV Partners were the most active among early-stage investors. The top late-stage investors were Premji Invest, SoftBank Vision Fund, and Creaegis.
Among Venture Capital (VC) firms, US-based Accel made the most investments (34 rounds) in H1 2025. Z47, an India-based fund, added three new companies to its portfolio.
Funding by stage
The Tracxn report also showed notable shifts across different funding stages.
There were just two funding rounds above $100 million in H1 2025, down from four in H2 2024 and five in H1 2024.
Major deals:
Large rounds were primarily in the fintech and retail sectors.
The report also added that Ather Energy was the only company from Karnataka to go public in H1 2025. The state also saw the creation of two unicorns, double the number in H2 2024, but down from three in H1 2024.
The report stated that the decline highlights slower investor activity across multiple sectors.
Top performing sectors
Despite the overall slowdown, fintech, enterprise applications, and retail were resilient and the top-performing sectors in H1 2025.
- Fintech raised $701 million, a 255% spike from $197 million in H2 2024, and 57% higher than H1 2024.
- Enterprise applications secured $619 million, a 3% rise from H1 2024.
- Retail bagged $542 million, a 27% jump from H2 2024 but down 48% from $1 billion in H1 2024.
Bengaluru-based tech companies accounted for the majority of funds raised in Karnataka during H1 2025.
Top investors in Karnataka’s tech scene included Accel, Angel List, and LetsVenture.
Top seed stage investors included Antler, 100X.VC, and Rainmatter. Accel, Alteria Capital, and Peak XV Partners were the most active among early-stage investors. The top late-stage investors were Premji Invest, SoftBank Vision Fund, and Creaegis.
Among Venture Capital (VC) firms, US-based Accel made the most investments (34 rounds) in H1 2025. Z47, an India-based fund, added three new companies to its portfolio.
Funding by stage
The Tracxn report also showed notable shifts across different funding stages.
- Seed stage: Total funding dropped to $141 million, a 41% decline from the $239 million raised in H1 2024.
- Early stage: Funding reached $611 million, a 3% dip from H1 2024.
- Late stage: Saw a sharp fall to $930 million in H1 2025, plummeting 56% from the same period last year.
There were just two funding rounds above $100 million in H1 2025, down from four in H2 2024 and five in H1 2024.
Major deals:
Large rounds were primarily in the fintech and retail sectors.
- Groww raised $202 million in a Series F round.
- Jumbotail secured $120 million in a Series D round.
The report also added that Ather Energy was the only company from Karnataka to go public in H1 2025. The state also saw the creation of two unicorns, double the number in H2 2024, but down from three in H1 2024.