India has taken the third spot in the world startup ecosystem, a recent report by Tracxn has shown. The report showed that India's startup ecosystem continued to expand during the first quarter of 2025, with a rise in investment of $2.5 billion.

Significantly, India now ranks just behind the UK and the US in startup activity. Of note, Delhi has recently surpassed Bengaluru in overall funding for the region in a milestone shift in India's startup ecosystem.
While Bengaluru registered a greater number of deals, Delhi's leadership in funding was mostly contributed by robust IPO exits. A few of Delhi-based tech companies accounted for 40% of all funding for tech companies in India, while Bengaluru recorded 21.64%.

"India has become one of the largest ecosystems in terms of both investment and startup activity," stated Tracxn co-founder Neha Singh. She further mentioned that when it comes to unicorns or late-stage businesses worth more than $1 billion, India is presently the third-largest startup ecosystem in the world.
Tracxn's report also noted a surge in late-stage investments, while early-stage investments declined. This shift is attributed to the strong pipeline of IPO-ready companies following a robust IPO market in 2024. Several venture-backed companies went public in the past year, creating a healthy pipeline of mature businesses preparing for IPOs.

The report also emphasized that Indian AI investment has been more about applications than infrastructure, and the quick-commerce business has grown with the success of Blinkit, Zepto, and Swiggy Instamart.
Also, the report indicated a remarkable increase in mergers and acquisitions, with 38 deals during Q1, a 41% year-over-year growth .