India, April 14 -- Last year, predictions ran amok that the Indian startup ecosystem will once again become a force to reckon with in 2025 on the back of renewed investor sentiment and an unforgiving funding winter coming to an end.

Despite a 41% year-on-year increase in startup funding to $3.1 Bn in Q1 2025, the overall funding activity in the world's third-largest startup ecosystem has remained flat since Q2 2024, according to Inc42's latest "Indian Tech Startup Funding Report Q1 2025". Indian startups raised a comparable amount in the second, third, and fourth quarters of 2024 as they did in the first quarter of 2025.

The needle failed to move on the deal count front, too. While Indian startups raised $2.2 Bn in 226 deals in Q1 2024,...