A decade of rapid transformation has reshaped India’s startup landscape, with new data highlighting strong growth in scale, funding, and regional spread. According to a report titled ‘2016-2025: The Startup Decade – The Making of a Bold and Powerful India’ by the Centre for Research on Start-ups and Risk Financing (CREST) at the Indian Institute of Technology Madras, annual startup incorporations have surged significantly.
The number of startups formed each year increased from about 10000 in 2016 to around 30000 annually between 2020–2025. Overall, the total startup count rose from 10000 in 2016 to 250000 by 2025, marking a 23x growth. Funded startups also saw a sharp rise, jumping from 2000 to 75000, a 36x increase.
The report highlights stronger formalisation across the ecosystem. About 79% of startups are now recognised by DPIIT, compared to just 3% in 2016.
Women-led startups have also grown steadily. Around 24% of startups are led by women founders. Their numbers increased from about 5800 in 2017 to 18700 in 2025, reflecting a 14% CAGR growth.
A major shift is visible in the geographic spread of startups. In 2016, Tier 1 cities had 6900 startups compared to 1600 in Tier 3 cities. By 2025, Tier 3 cities surged to 26100 startups, far surpassing Tier 1 cities at 6600. At the same time, districts with zero startups reduced from 276 to 59.
Sector-wise, startup activity is concentrated in Food & Beverage, Construction, and Healthcare, driven by urbanisation and consumption. However, funding is largely directed towards digital sectors such as E-commerce, FinTech, SaaS, and AI.
“Certain communities, traditionally strong in business, continue to demonstrate remarkable entrepreneurial drive and success in the start-up arena. The report presents the nation’s first-ever comprehensive league tables for top incubators, VCs, banks, and DeepTech investors. These resources will serve as critical guides for founders seeking support, investors identifying key partners, and policymakers refining ecosystem strategies, offering unprecedented transparency and insights into who is truly fuelling India’s start-up engine,” said Thillai Rajan, Professor, Department of Management Studies, IIT Madras, and Head, CREST.
Despite this growth, challenges remain. Only about 25000 startups, or less than 10% of the total, receive incubation support. Among 840 incubators classified as weak ecosystems, only 17% of supported startups secure funding. In comparison, 207 strong ecosystems show around 70% median funding conversion.
On employment, job creation is widely distributed. Large startups with over 500 employees contribute only 4.7% of total jobs.
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