India's Startup Shutdowns Surge to 12X: 28.5K+ Closed in 2023-24
- Jasaro.in
- 15 minutes ago
- 2 min read
Reports from late April 2025 mention that India's startup ecosystem saw a 12X surge in shutdowns (in 2023-24), amid funding constraints (i.e., "funding winter.")
Startups Shutdowns
28,630+ startups have shut down in the past 2 years - 15,921 in 2023 and 12,717 in 2024, that's 12-fold jump from those that shutdown from 2019 to 2022.
259 for Q1-2025, numbers are expected to swell in coming months
12,717 in 2024
15,921 in 2023
2,300 from 2019 to 2022
The reasons for these shutdowns are varied, including funding crunch, lack of product-market fit (PMF), high cash burn, unsustainable business models, and at times financial irregularities or regulatory hurdles.
According to sources, the sectors that saw the maximum shutdowns were EdTech, AgriTech, FinTech, and HealthTech. These startups failed largely because the early and large capital infusion led to high cash burn and a growth-at-all-cost mentality.
Most startups had raised funding at hefty valuations in 2021-2022, and thus failed to mop up follow-on investments in 2023 & beyond, especially when the business wasn’t doing well.
Investors too have turned cautious since 2023, and are investing only in startups with healthy financials (for Seed rounds) and a proven PMF (for Series A/beyond).
Startups Launched
The number of startups launched fell to just 5,264 in 2024 from over 9,600 per year between 2019 and 2022. Till Q1-2025, barely 125 startups have been founded
125 for Q1-2025
5,264 in 2024
9,600 each year between 2019 and 2022
According to Tracxn, the number of startup acquisitions too decreased from 248 in 2021 to 131 in 2024. The lack of meaningful consolidation is another reason for the slower pace of acquisitions.
Source: The Financial Express
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