India’s startup ecosystem is witnessing a significant downturn, with more than 28,000 startups shutting down over the past two years amid financial strain, operational challenges, and reduced investor appetite.

According to data compiled by the intelligence platform Tracxn, a total of 15,921 startups ceased operations in 2023, followed by another 12,717 in 2024.

This marks a sharp contrast to the previous period between 2019 and 2022, when only around 2,300 startups closed over three years, Financial Express reported.

The slowdown has also impacted new entrepreneurial activity. Only 5,264 startups were launched in 2024 — nearly half of the average annual figures recorded between 2019 and 2022, which saw more than 9,600 startups founded each year. 
So far in 2025, only 125 new startups have been registered, indicating a continued slump in the ecosystem.

Sectors such as agritech, fintech, edtech, and healthtech have seen the highest number of shutdowns, sources familiar with the data said. Many of these ventures collapsed under the weight of unsustainable business models driven by early and excessive capital inflow. This often led to a "growth-at-all-costs" approach, resulting in high cash burn rates and poor customer retention, which in turn escalated operational expenses and eroded profitability.

The decline in mergers and acquisitions has further exacerbated the crisis. Startup acquisitions dropped from 248 in 2021 to just 131 in 2023, according to Tracxn.

Industry observers note that the lack of meaningful consolidation has left struggling startups with limited exit opportunities, contributing to the rising number of closures.

Already in 2025, 259 startups have shut down, and experts warn that the figure is likely to climb further in the months ahead, reflecting broader structural challenges within the Indian startup landscape.