Karnataka saw a total of $1.7 billion in funding during the first half of 2025, a significant decrease of 30% from the $2.4 billion raised in the second half of 2024, and a 44% drop compared to $3.0 billion raised in H1 2024, according to Tracxn’s recent Karnataka Tech H1 2025 Funding Report.
While the report reveals a considerable decline in overall funding levels, Bengaluru continued to dominate as the hub of tech investment within the state.
The decline reflects subdued investor activity across several segments when compared to prior periods, the report stated. However, some verticals, such as fintech and enterprise applications, remained resilient.
Funding Stages
Seed stage saw a total funding of $141 million in H1 2025, a drop of 39% compared to $233 million raised in H2 2024, and a drop of 41% compared to $239 million raised in H1 2024.
The early stage saw a total funding of $611 million in H1 2025, an increase of 15% compared to $531 million raised in H2 2024, and a drop of 3% compared to $630 million raised in H1 2024.
The late stage witnessed a total funding of $930 million in H1 2025, a drop of 44% compared to $1.6 billion raised in H2 2024, and a drop of 56% compared to $2.1 billion raised in H1 2024.
Sectors
Fintech, enterprise applications, and retail were the top-performing sectors in H1 2025.
Fintech sector saw a total funding of $701 million in H1 2025 which is an increase of 255% when compared to $197 million raised in H2 2024 and a rise of 57% when compared to $446 million raised in H1 2024.
Enterprise applications sector saw a total funding of $619 million in H1 2025 which is an
increase of 1% when compared to $611 million raised in H2 2024 and an increase of 3% when compared to $604 million raised in H1 2024.
The retail sector saw a total funding of $542 million in H1 2025 which is an increase of 27% when compared to $428 million raised in H2 2024 and a drop of 48% when compared to $1.0 billion raised in H1 2024.
Companies
H1 2025 has witnessed two $100 million+ funding rounds, four in H2 2024, and five rounds in H1 2024. Companies like Groww and Jumbotail have managed to raise funds above $100 million in this period.
Groww has raised a total of $202 million in a Series F round. Jumbotail has raised a total of $120 million in a Series D round.
A major part of these $100 million+ funding rounds are from fintech and retail sectors. Ather Energy was the only company to go public in H1 2025.
Unicorns & Acquisitions
Two 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 $150 million. This became the highest valued acquisition in H1 2025 followed by the acquisition of Fintellix by ICRA at a price of $26 million.
Bengaluru & Investors
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 three new companies to its portfolio.
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