Karnataka's Tech Ecosystem Faces Funding Decline Amid Market Shifts

Karnataka's tech startups experienced a 23% decline in funding for Q1 2025 compared to the previous quarter. The funding fell from USD 825.5M in Q4 2024 to USD 633M. Despite the decline, sectors like enterprise applications, fintech, and retail performed well. Mergers and acquisitions increased with Amazon's acquisition of Axio as a highlight.

Karnataka's tech startups witnessed a significant funding decline in the first quarter of 2025, securing USD 633 million, marking a 23% drop from the previous quarter, according to the Tracxn report.

The comprehensive report revealed a stark reduction in funding activity compared to both the last quarter and the same period in the previous year. The notable decrease underscores a general pullback in venture capital investments across the Karnataka tech ecosystem.

Despite the downturn, sectors such as enterprise applications, fintech, and retail demonstrated strong funding attraction. Additionally, merger and acquisition activity surged, highlighted by Amazon's USD 150 million acquisition of Axio.

(With inputs from agencies.)