Startup Funding Rounds and Major Layoffs in India
India’s startup ecosystem is recognised for its dynamism, creativity, and toughness. However, there have been some mixed experiences across the industry in the last year, such as strong funding rounds in certain sectors but layoffs in others—reflecting the benefit of startups refocusing their business models to profitability from growth. This shift also mirrors trends seen in the Highest-Paid CEOs earning in Millions, where leadership strategies increasingly prioritize sustainable expansion over rapid scaling.
Funding: Selective but Intentional
Funding is still happening in India, but it appears to be under more scrutiny than before, in that investors prefer business models geared toward sustainability versus cash-burning.
Established technology sectors like fintech, SaaS, EV mobility, and deep-tech continue to attract the interest of investors. In fact, some early-stage startups secured both seed and Series A funding, suggesting that investors are left, from a variety of assessments of early and mid-stage startups, to still back strong value propositions.
In the meantime, late-stage funding appears more selective. Notably, many unicorns have relied on internal funding rounds, bridge funding, or debt-based fundraising—the last form requiring less equity dilution—to manage their operations. In all cases, the emphasis is placed on unit economics, long-term revenue planning, and less reliance on outside capital.
Layoffs: A Reality Check
In addition to the funding realignment, India has experienced significant layoffs across the edtech, e-commerce, fintech, and mobility sectors as well. High-profile examples of layoffs include well-known companies such as Byju’s, Dunzo, and Ola and numerous mid-stage startups.
The underlying rationale can vary:
- Over-hiring during the pandemic boom
- Decreased demand in certain sectors
- Cost reduction to lengthen the runway
- Pressure to move to profitability quickly
However, in most cases, experts believe that layoffs constitute a market correction rather than a crisis. Startups are refocusing their teams to be more productive, improving efficiencies, and prioritising core products and offerings.
The Road Ahead
India’s startup ecosystem is in the process of recalibrating itself. Capital is flowing again, but in a more outlined and thoughtful manner. Laycases are happening, but in many cases are a signal of the transition to building responsibly.
As long as global markets stabilise and domestic demand continues to grow, India’s startups should emerge leaner, more nimble, and sustainable in the long run.
