Karnataka tech startups' funding dips to $633 million in March quarter

Karnataka's tech startups garnered $633 million in funding during the January-March period of 2025, a 23 percent decline from the previous quarter, according to a report. The Karnataka Tech Quarterly Funding Report Q1 2025, released by Tracxn, revealed a contraction in funding activity compared to the previous quarter and the same period last year.

"A total of $633M was raised in Q1 2025, marking a 23 percent decline compared to the $825.5M raised in Q4 2024 and a 46 percent drop from the $1.20 billion raised in Q1 2024. This significant downturn highlights a widespread pullback in venture activity across the Karnataka tech ecosystem," the report, which was released on Wednesday, said.

According to the report, no new unicorns or funding rounds exceeding $100 million was recorded this quarter. Despite the overall downturn, sectors such as enterprise applications, fintech, and retail showed strong performance.


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Seed-stage funding saw a decrease of 14 percent to $57.3 million, while late-stage funding dropped significantly by 48 percent to $282 million. Early-stage funding, however, experienced a 34 percent increase, reaching $294 million.

Enterprise applications led the pack with $298.6 million in funding, followed by fintech at $221.1 million and retail at $219.8 million.

Merger and acquisition activity saw a surge, with 21 tech acquisitions recorded, a 91 percent increase from the previous quarter. Amazon's $150 million acquisition of Axio was the highest-valued deal of the quarter.

Bengaluru, known as the startup hub of India, accounted for over 99 percent of the total funding in the state. Accel, Blume Ventures, and Sequoia Capital emerged as the top investors in the Karnataka tech ecosystem.

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