India has seen the shutdown of 11,223 startups so far in 2025, a sharp 30% rise compared to 8,649 closures in 2024, according to Tracxn data shared with financialexpress.com. The year is not even over, highlighting the challenges facing the country’s entrepreneurial ecosystem.
The closures span multiple sectors. Healthcare booking platforms lost 762 startups, investment tech saw 579 shut down, internet-first brands lost 817, fashion tech recorded 840 closures, HR tech saw 846, and education IT lost 549. Prominent names that shut down this year include Hike, Beepkart, Astra, Ohm Mobility, Code Parrot, Blip, Subtl AI, Otipy, Log 9 Material, and ANS Commerce.
The B2C e-commerce sector bore the brunt, accounting for 5,776 of the closures. Enterprise software and SaaS startups also struggled, with 4,174 and 2,785 shutting down respectively. Experts note that consumer-facing businesses face high customer acquisition costs, limited revenue visibility, and funding constraints, while B2B players struggle to convert pilots into sustainable contracts amid tighter corporate budgets.
The pattern reflects the changing funding environment. In 2020, venture capital was plentiful, allowing founders to experiment with multiple business models. By 2025, seed-stage investors demand clear traction before investing. Tracxn data shows seven startups shut down within a year of starting this year, compared to just one in 2024. Failures are happening earlier in the startup lifecycle.
Nithin Kamath, co-founder and CEO of Zerodha, recalled that in 2010 VC was rare, mostly provided by family, and the ecosystem focused on e-commerce and fintech. Today, better connectivity, education, incubation centres, and corporate investors have expanded the ecosystem, but expectations for proof of market fit and traction are higher.
Regulated sectors like healthcare, education, and financial services face added challenges navigating compliance and legal requirements. Neha Singh, co-founder of Tracxn, emphasized that survival depends on strong fundamentals: validating market demand, maintaining financial discipline, and managing regulatory requirements. Without these, startups risk bloated costs, unsustainable growth, and early closure.
The spike in closures may seem alarming, but some experts view it as the market recalibrating, pruning excess and overambitious ventures. For now, founders and investors must adapt to tighter funding, higher expectations, and a more disciplined approach to building sustainable businesses.
