Spacetech, Record Number Of IPOs, Deeptech Push: The Big Moments From India’s Startup Ecosystem In 2025

The Indian startup ecosystem marked a clear shift in 2025, from survival to consolidation. After two years of capital tightening, the narrative moved decisively towards liquidity, scale, and strategic alignment with national priorities. 

The year saw Indian startups operate in a far more disciplined environment. Growth was no longer pursued at any cost, valuations corrected to more realistic levels, and investors prioritised business models with clearer paths to profitability and defensibility. 

At the same time, emerging sectors like spacetech, defence tech, semiconductors, and GenAI gained prominence, reflecting a broader shift towards capital-intensive, IP-led innovation.

This change was mirrored in capital flows. While overall venture funding remained selective, deeptech funding hit an all-time high, and exits, particularly via IPOs, surged. 

As many as 18 startups went public in 2025, raising roughly INR 21,474.30 Cr via fresh issues, delivering significant liquidity to early investors and reinforcing India’s public markets as a viable exit route for venture-backed companies.

2025 also stood out for the growing role of the state in shaping the startup ecosystem. Initiatives such as the IndiaAI Mission, the continued push under Semicon India, and defence indigenisation policies directly influenced where capital and entrepreneurial talent flowed. 

Startups were no longer just building for consumers or enterprises, but increasingly for sovereign, strategic, and infrastructure-level use cases.

Despite lingering global uncertainty and cautious investor sentiment, Indian startups continued to push into new frontiers, from testing orbital-class rocket boosters and scaling defence manufacturing, to building indigenous AI models and semiconductor chips. 

With these shifts in mind, here’s a closer look at the key developments and milestones that defined the Indian startup ecosystem in 2025.

18 Startups Went Public In 2025

The year saw 18 startups go public, collectively raising around NR 21,474.30 Cr through fresh share issues. 

This wave included major names such as Groww, Urban Company, Lenskart, and PhysicsWallah, the latter becoming the first Indian edtech company to list on the stock market, raising INR 3,480 Cr while keeping 80% equity with the founders. 

These IPOs delivered substantial returns to early backers, with Peak XV Partners making over INR 2,480 Cr across four listings, with Groww alone yielding a 52x return, while Y Combinator realised INR 1,134 Cr from Groww and Meesho, achieving a 109x return on Meesho. 

Other prominent investors like Accel, Tiger Global, and Elevation Capital also executed high-value partial exits, demonstrating the growing maturity of the Indian capital markets.

Deeptech Funding Hits All Time High At $530 Mn 

India’s deeptech funding hit an all-time high in 2025, with startups in the space raising $530 Mn, marking a 13X jump over the past five years. 

After years of being a fringe allocation within India’s VC landscape, deeptech emerged as one of the few categories to see sustained capital inflows even as broader startup funding declined slightly.

The momentum in 2025 was driven largely by AI-first, spacetech and defence-linked deeptech startups, with investors backing companies aligned with national priorities such as compute infrastructure and indigenous hardware. 

Spacetech players like Digantara, which raised a $50 Mn Series B for space surveillance, and SpaceFields, which secured funding to build rocket propulsion systems. At the same time, AI and semiconductor startups like Netrasemi, along with the ones selected by IndiaAI Mission, bet on homegrown compute and hardware.

Skyroot Aerospace Test-Fires Kalam-1200 Booster 

Indian spacetech marked a major inflection point in 2025 as Skyroot Aerospace successfully test-fired the Kalam-1200 booster, becoming the first private spacetech startup in the country to test a first-stage solid rocket motor. 

The test is a critical milestone in Skyroot’s roadmap towards launching Vikram-1, its first orbital launch vehicle, and underscores the rapid maturation of India’s private space ecosystem beyond suborbital missions.

The Kalam-1200 is the largest solid rocket motor developed by a private Indian company, designed to deliver the thrust required for orbital-class missions. The successful static fire validated the booster’s propulsion system, structural integrity, and ignition sequence, key prerequisites before proceeding to full vehicle integration. 

This test places Skyroot in a small global cohort of private launch startups that have independently developed and tested large rocket stages, signalling India’s growing credibility in commercial launch services.

Raphe mPhibr Inches Toward Unicorn Status

Indian defence tech reached a defining milestone in 2025 as Raphe mPhibr emerged as the first homegrown defence startup to inch towards unicorn status.

The Noida-based startup’s rapid scale-up comes as it raised a $100 Mn funding round, one of the largest ever for Indian defence tech startups. 

The Noida-based startup designs and manufactures unmanned aerial vehicles (UAVs) for surveillance, logistics, and tactical operations. Unlike early-stage defence startups focused on pilots and prototypes, Raphe mPhibr has achieved production-scale execution, having delivered over 1,900 drones to the Indian Army, Navy, and Air Force across diverse operational environments. 

PhysicsWallah Becomes First Edtech Startup To Go Public

PhysicsWallah became the first Indian edtech startup to list on the stock exchanges in 2025, marking a key moment for a sector that has faced sustained pressure since the post-pandemic funding reset. 

The listing came at a time when most edtech companies were grappling with layoffs, slowing growth, and investor pullback, making PhysicsWallah’s public market debut an exception rather than the norm.

The company raised INR 3,480 Cr via its IPO which valued it at approximately INR 31,500 Cr. Unlike earlier edtech peers that relied heavily on aggressive customer acquisition and capital-intensive expansion, PhysicsWallah followed a low-cost, high-volume model, offering test preparation courses at significantly lower price points. 

The approach translated into scale, with the company reporting over 45 lakh paid students across online and offline formats at the time of listing.

IndiaAI Mission: 12 Startups Selected To Build Sovereign AI Models

Under the IndiaAI Mission, the government selected 12 startups in 2025 to develop sovereign AI  models, marking a coordinated push to build domestic foundational AI capabilities. 

The initiative is aimed at reducing reliance on foreign large language models and ensuring greater control over data, compute infrastructure, and AI deployment in strategic sectors.

The selected cohort includes startups such as Krutrim, Sarvam AI, CoRover, Gnani AI, Skit.ai, Gan.ai, KissanAI, among others, covering a mix of large language models, Indian language processing, voice AI, and enterprise-focused generative AI systems. 

These startups are tasked with building foundational or domain-specific models, rather than application-layer tools, with use cases across governance, healthcare, education, agriculture, and public services.

By backing domestic model builders, the IndiaAI Mission aims to establish an indigenous AI stack, covering models, compute, and deployment, rather than limiting innovation to downstream applications built on foreign platforms.

Vikram 3201: First Indigenous Semiconductor Chip

India marked a milestone in its semiconductor journey in 2025 with the development of Vikram 3201, the country’s first indigenous semiconductor chip to move from design to fabrication readiness. 

The chip represents a step towards reducing India’s dependence on imported semiconductors and building domestic capability in chip design and system-level integration.

Vikram 3201 is positioned as a general-purpose microcontroller-class chip, designed for use in applications such as industrial electronics, IoT devices, smart infrastructure, and embedded systems. 

The development of Vikram 3201 aligns with the government’s broader semiconductor push, including the Semicon India programme and incentives for domestic design and manufacturing. 

While Vikram 3201 does not immediately change India’s position in global chip manufacturing, it establishes a baseline capability in homegrown chip design and deployment. The real significance will depend on adoption by domestic OEMs, follow-on designs, and the ability to translate this initial effort into repeatable semiconductor development at scale.

Edited by Nikhil Subramaniam