India's Startup Reality Check: 729 Firms Shut in 2025 Amid Funding Crunch

• 729 Indian startups shut down in 2025, a decline from 978 in 2024, but new business formation plummeted from 19,000 in 2020 to 978 in 2025.
• Shutdowns were driven by tightened funding, rising costs, and strained business models, affecting sectors like enterprise applications, retail, and ed-tech.
• Consumer-facing (B2C) startups bore the brunt, with 14,000 closures since 2020, 72% more than B2B firms, due to high acquisition costs and funding dependency.
• Notable closures include BluSmart (financial misconduct), The Good Glamm Group (aggressive acquisitions), Hike (regulatory shifts), and Altigreen (losses).
• The ecosystem is shifting towards discipline, rewarding governance, capital efficiency, and realistic growth over rapid expansion.

Why It Matters: Indian startups face a harsh reality: 729 closures in 2025 signal a shift to disciplined growth.