Mumbai Startup Funding Falls 46% YoY To $2.1 Bn In 2025

When Mumbai topped the startup funding charts in 2024, it signalled India’s financial capital’s growing clout in the new-age tech ecosystem. However, the momentum proved fleeting.

As per Inc42’s Annual Indian Startup Trends Report, 2025, India’s financial capital slipped back to its familiar third place in the previous year. Startups based in the city managed to raise over $2.1 Bn across 146 deals during the year, way behind the $4.6 Bn raised by Bengaluru-based startups and the $2.2 Bn capital infusion in the Delhi NCR startup ecosystem during the previous year.

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On a year-on-year basis, the capital infusion for Mumbai’s startup ecosystem was nearly half (45.5% to be precise) of the $3.7 Bn raised in the preceding year. The deal count also rationalised to 146 last year, compared to 175 transactions that materialised in 2024. 

While the decline in the transaction count impacted funding trends, the year also saw Zepto, one of the brightest quick commerce unicorns, move its headquarters from Mumbai to Bengaluru. Worth mentioning that the IPO-bound startup had added over $1 Bn to Mumbai’s cumulative funding in 2024.

For Zepto, the relocation was more than a logistical shift — it was a symbolic reminder that when Indian startups scale, they often look to the Southern startup hub. 

However, beneath the headline dip, Mumbai’s startup engine continued to deliver. Ecommerce emerged as the most funded sector in 2025, with big-ticket rounds for B2B major Infra.Market and online pharmacy giants PharmEasy and Truemeds anchoring the deal flow. 

True to its name as India’s financial capital, Mumbai also saw fintech players Snapmint, Raise Financial Services (Dhan), InCred and Infinity Fincorp Solutions also raise copious amounts of capital from marquee names. Important to mention that Dhan became the latest addition to Mumbai’s unicorn club in 2025 after nabbing $120 Mn in a funding round led by Hornbill Capital and Japan’s MUFG back in October.

Not just this, the city also emerged as the third largest hub  housing homegrown listed new-age tech companies over the past year. Eight of the 56, or 15% of the total, listed startups are headquartered in Mumbai, with a cumulative market capitalisation of $11 Bn. 

That said, while Bengaluru continued to dominate funding headlines in 2025 with its tech-first narrative, Mumbai’s startup ecosystem charted a distinct trajectory. The financial capital’s new-age tech ecosystem was anchored in fintech and ecommerce, and backed by its deep capital markets, corporate headquarters and financial services expertise

So what does the city’s 2025 performance reveal about its evolving strengths and structural challenges?

A Year Of Recalibration

On the surface, Mumbai’s 2025 numbers look solid – over $2 Bn raised across 146 deals. However, the texture of funding tells a more nuanced story. Bigger cheques gravitated towards late-stage startups, with proven models and stronger unit economics. Early-stage cheque flow remained in line with the broader national reset on growth-at-all-costs narratives.

At the same time, Mumbai’s sector mix in 2025 underlined its enduring strengths. Ecommerce’s dominance as the top-funded sector underscored the city’s might in consumer businesses, retail infrastructure and logistics. 

Fintech also attracted significant capital, leveraging Mumbai’s proximity to financial institutions and insurance companies. The city’s corporate ecosystem provides not just capital but also customers, distribution channels and strategic exits – advantages that pure-play tech hubs like Bengaluru often lack. 

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The outcome is an ecosystem that may not dominate headlines, but is steadily prioritising sustainability, exits and IPO-readiness over vanity valuations and unicorn tallies.

Despite this, Mumbai’s startup ecosystem continues to grapple with deep structural challenges that limit its ability to compete with Bengaluru startup hub’s velocity and breadth. High operational costs like rent remain the most visible barrier, while higher employee costs also add to the challenges. 

On top of this, the city’s talent pool remains weaker in deeptech, SaaS and engineering compared to Bengaluru’s density of tech talent. Nevertheless, long-term numbers tell a more mature story.

The Broader Picture

Mumbai’s startup ecosystem has demonstrated remarkable resilience and maturity over the past decade. With over 1,100 funded startups, the city’s new-age tech ecosystem raised more than $24 Bn in capital between 2014 and 2025, accounting for 14% of the total funding raised by Indian startups.

As per Inc42 data, this translates into a 14% compounded annual growth rate (CAGR) in funding amount over the ten-year period. The city also boasts 18 unicorns, 34 soonicorns and 14 minicorns. 

Mumbai startups also reportedly contribute around 10-12% to the city’s GDP and have created more than 10,000 engineering jobs during the period, giving Bengaluru strong competition.

On the consolidation front, India’s financial hub has clocked over 217 mergers and acquisitions (M&As) over the past decade, reflecting the ecosystem’s maturity and the availability of strategic exits for founders and investors .

Going forward, Mumbai’s 2026 performance will hinge on whether it can deepen its fintech and ecommerce moats while also capturing a meaningful share of AI-led capital allocation.

This local test mirrors a broader national reset. Indian startup funding is expected to recover modestly to $11.5 Bn–$13.8 Bn, with capital becoming more selective, patient and domestically anchored. In such an environment, Mumbai’s capital markets depth and operator-led ecosystem could increasingly work in its favour.

The city sits at the intersection of established BFSI institutions and fast-growing fintech players, creating sustained demand for allied ventures that are focussed on sustainable growth.​ Ecommerce and consumer services could also push Mumbai’s startup ecosystem, creating a more diversified new-age tech landscape.

But a key question remains — can Mumbai’s blend of capital, corporate networks and profitability-first culture help it challenge Bengaluru’s hegemony, or will the city’s risk-averse financial DNA limit its ability to back moonshot ideas in 2026?

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[Edited by: Akshit Pushkarna]