India’s Startup Ecosystem Faces Major Crisis in 2025
E-commerce sector hit hardest with funding shortages
Oct 25, 2025 - India’s startup ecosystem, which was once called the “engine of the new economy,” is now going through a major challenge and experiencing a period of recalibration. According to a report by Traction, as of 2025, 11,223 startups have shut down. This is nearly three times more than the 3,649 closures in 2024 and marks a significant 30% increase in closures compared to the previous year, with sectors like B2C e-commerce, enterprise software and SaaS most affected.
The shutdown includes well-known companies like Hike, Beepkart, Astra and others. Many startups, despite years of effort and investment, eventually sent winding-down emails to officially end their operations. The widespread closures are driven by a challenging investment climate and a shift toward proven, profitable business models.
The lack of funding has hit the e-commerce sector the hardest, with 5,776 companies shutting down.
With Media Inputs
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