Tech investment on decline: Gulf participation in India’s tech ecosystem thinned sharply in 2025, with only one major investment by UAE in a tech startup making the year’s top funding list. The overall investments in tech startups shrunk to a five-year low of around USD 11 bn, according to market intelligence platform Tracxn.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The pullback extends the decline that began after the 2021 peak, when Indian start-ups raised USD 38.9 bn. In 2025, funding rounds above USD 100 mn fell to 14 from 19 in the previous year, and the steepest USD-value retreat was at the late stage funding rounds. While seed funding also contracted and early-stage inflows inched up.

ADIA-Meril emerges as sole prominent Gulf investment of 2025

Abu Dhabi Investment Authority’s (ADIA) USD 200 mn Series D cheque to medical-devices company Meril in July 2025 was the only notable Gulf sovereign wealth fund investment in a startup, the data compiled by Tracxn shows. No other Gulf fund appeared in Tracxn’s mega-rounds (USD 100 mn-plus) list.

Regional contrast: This stands in contrast to 2020-2022, when GCC funds were active participants in India’s late-stage consumer and fintech landscape. In 2025, most large investments were led by funds based in Singapore, US and EU.

No Gulf investor features among the “50 most active investors positions” tracked by Tracxn, highlighting the shift from broad-based Gulf participation to selective and high-conviction exposure.

Broader India-wide trend

The sharpest retreat in funding activity in India occurred at the late stage, where funding fell 26% y-o-y to around USD 5.5 bn. Early-stage inflows rose 7% y-o-y, while seed-stage funding declined by 30% y-o-y, reflecting investor caution towards high-burn models.

Tracxn told EnterpriseAM the slowdown represents a long-term structural shift, not just a temporary correction. “Elevated interest rates, geopolitical instability, and uneven demand have driven a more cautious investment environment,” the firm said. “Investor focus has increasingly moved towards businesses that are sustainable, scalable, and profitable, with clearer risk profiles.”

“Start-ups that are able to leverage AI to improve efficiency and reduce costs are becoming more attractive to investors, while competition is intensifying as tech sectors mature,” Tracxn noted.

Even as funding declines to record lows, India remains one of Asia’s largest start-up ecosystems given the high volume of new enterprises, offering Gulf allocators a wide-range of investment opportunities.

Tags: