Sun Dec 28 14:29:12 UTC 2025: ## Bengaluru’s Startup Scene Ends 2025 on a High Note Despite Funding Dip
Bengaluru, India – December 28, 2025 – Despite a downturn in overall funding, Bengaluru’s startup ecosystem is ending 2025 with a positive outlook, driven by the rise of AI and deep tech, according to a report by The Hindu. The city climbed to 5th place globally among AI ecosystems and 14th in the overall Global Startup Ecosystem Ranking.
The year was marked by significant investment in deep tech, with the Karnataka government announcing a ₹600 crore investment pool for startups in AI, machine learning, quantum computing, and other advanced technologies. Funding for Indian deep tech startups surpassed $1.5 billion, up from $1.17 billion the previous year.
Experts highlight a shift towards sustainability, with startups focusing on unit economics and real-world applications. Increased attention on national security and sovereign interests also fueled growth in sectors like Aerospace and Defence, with progress noted in space tech, robotics, and quantum computing.
While overall startup funding in Bengaluru saw a 37% dip compared to 2024, investors remain optimistic. They argue the previous year’s high was inflated by large funding rounds for a few startups. With significant “dry powder” still available, they anticipate a strong 2026, with increased growth-stage capital.
Industry leaders are also calling for better collaboration between industry and academia to further boost innovation. Premium institutes are already moving in this direction, with incubators like STEM cell at IISc onboarding numerous deep science and tech startups.
Despite the funding decrease, Bengaluru’s startup ecosystem is poised for continued growth in 2026, driven by deep tech innovation and strategic government support.
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