India’s startup ecosystem is diversifying beyond major cities, with more than 68,000 startups now based in emerging regional hubs, according to a report. The funding ecosystem is maturing, providing stronger capital support and driving growth in the startup sector. Cities like Jaipur, Surat, Indore, Coimbatore, Kochi, and Lucknow are witnessing a rise in venture creation, indicating the growth of regional startup nodes.
Sectoral activities in these regions are mainly driven by demand, particularly in sectors like edtech, internet-first media, fashion tech, and online grocery platforms. These sectors align with local consumption patterns and industrial strengths. Jaipur, Indore, Kochi, and Surat are predicted to play increasingly significant roles in shaping India’s innovation landscape.
While funding and exits are concentrated in a few companies and cities, there has been a geographical expansion in startup formations. Over the past decade, funding participation has matured, with startups outside major cities attracting around $3.2 billion in investments from 2016 to 2025. The report highlights a shift towards conviction-led investment strategies, with median round sizes increasing significantly.
Seed funding in emerging ecosystems has grown from $27 million in 2016 to $167 million in 2025, showcasing these regions as consistent startup hubs. Mega funding rounds exceeding $100 million are rare but crucial for scaling platforms nationally or globally. Recently, two startups from regional clusters achieved unicorn status, emphasizing the potential of these ecosystems for large-scale outcomes.
Exit activities have also shown progress, with 102 acquisitions and 33 IPOs recorded between 2016 and 2025. The report suggests that the future growth of the startup ecosystem will rely on strengthening mid-stage funding pathways, talent networks, and institutional support systems rather than just expanding company numbers.
