Tracxn has released its Karnataka Tech H1 2025 Funding Report, offering a comprehensive look into the state’s tech investment activity for the first half of the year. The report reveals a considerable decline in overall funding levels, alongside notable shifts across funding stages and sector dynamics. Despite the broader slowdown, certain verticals such as FinTech and Enterprise Applications remained resilient, and Bengaluru continued to dominate as the hub of tech investment within the state.
A total of $1.7B was raised in Karnataka in H1 2025, marking a significant decrease of 30% compared to $2.4B raised in H2 2024, and a drop of 44% compared to $3.0B raised in H1 2024. This decline reflects subdued investor activity across several segments when compared to prior periods.
Seed stage saw a total funding of $141M in H1 2025, a drop of 39% compared to $233M raised in H2 2024, and a drop of 41% compared to $239M raised in H1 2024. Early stage saw a total funding of $611M in H1 2025, an increase of 15% compared to $531M raised in H2 2024, and a drop of 3% compared to $630M raised in H1 2024. Late stage witnessed a total funding of $930M in H1 2025, a drop of 44% compared to $1.6B raised in H2 2024, and a drop of 56% compared to $2.1B raised in H1 2024.
FinTech, Enterprise Applications, and Retail were the top-performing sectors in H1 2025. FinTech sector saw a total funding of $701M in H1 2025 which is an increase of 255% when compared to $197M raised in H2 2024 and a rise of 57% when compared to $446M raised in H1 2024. Enterprise Applications sector saw a total funding of $619M in H1 2025 which is an increase of 1% when compared to $611M raised in H2 2024 and an increase of 3% when compared to $604M raised in H1 2024. Retail sector saw a total funding of $542M in H1 2025 which is an increase of 27% when compared to $428M raised in H2 2024 and a drop of 48% when compared to $1.0B raised in H1 2024.
H1 2025 has witnessed 2 $100M+ funding rounds, 4 in H2 2024, and 5 rounds in H1 2024. Companies like Groww and Jumbotail have managed to raise funds above $100M in this period. Groww has raised a total of $202M in a Series F round. Jumbotail has raised a total of $120M in a Series D round. A major part of these $100M+ funding rounds are from FinTech and Retail sectors. Ather Energy was the only company to go public in H1 2025. 2 unicorns were created in H1 2025, an increase of 100% compared to 1 in H2 2024, and a drop of 33% compared to 3 created in H1 2024.
Tech companies in Karnataka saw 26 acquisitions in H1 2025, a drop of 4% compared to 27 in H2 2024, and a rise of 24% compared to 21 in H1 2024. Fisdom was acquired by Groww at a price of $150M. This became the highest valued acquisition in H1 2025 followed by the acquisition of Fintellix by ICRA at a price of $26M.
Bengaluru-based tech firms accounted for the majority of the funding raised by tech companies across Karnataka.
Accel, Angel List and LetsVenture were the overall top investors in Karnataka Tech ecosystem. Antler, 100X.VC and Rainmatter were the top seed stage investors in Karnataka Tech ecosystem for H1 2025. Accel, Alteria Capital and Peak XV Partners were the top early stage investors in Karnataka Tech ecosystem for H1 2025. Premji Invest, SoftBank Vision Fund and Creaegis were the top late stage investors in Karnataka Tech ecosystem for H1 2025. Among VCs, United States based Accel led the most number of investments in H1 2025 with 34 rounds, while India based fund Z47 added 3 new companies to its portfolio.
The Karnataka tech ecosystem saw a noticeable funding slowdown in H1 2025, with total capital inflow dropping sharply from both H2 2024 and H1 2024 levels. However, sectors like FinTech and Enterprise Applications displayed strong resilience, with FinTech alone tripling its investment compared to the last half-year. While late-stage and seed-stage funding dropped, early-stage rounds showed marginal growth. Bengaluru maintained its dominance in driving the state’s tech funding, and Accel emerged as the most active investor. Despite fewer mega-rounds and only one IPO, the ecosystem still witnessed the creation of two new unicorns and notable acquisitions led by Groww.
