The number of Indian startups shut down is soaring as the once-roaring ecosystem faces a harsh correction. The term “Indian startups shut down” is central to this story, because it captures the scale and urgency of the situation.
Recent data from intelligence provider Tracxn shows that:
- 15,921 startups shut operations in 2023.
- 12,717 more shut down in 2024.
- This gives a total of over 28,000 closures in just two years.
- For comparison, only around 2,300 startups were recorded to shut between 2019-2022 combined.
What’s driving the closures?
- Funding winter: After years of rapid investment and high valuations, venture capital flows have slowed sharply. Many startups that raised early found follow-on funding hard to access. The Financial Express
- Growth-at-all-costs models: Startups in sectors such as agritech, fintech, edtech and healthtech expanded rapidly but struggled with unit economics, retention and sustainable revenue.
- New launches also declining: In 2024, only about 5,264 new startups were founded in India, down from over 9,600 per year in 2019-22
- Reduced acquisitions/exit opportunities: With fewer buy-outs and IPOs, failing startups had limited exit options.
Impact of the trend
- For founders: The narrative of “startups everywhere” is under pressure. Investors are now more cautious, expecting proven business models and realistic growth.
- For investors: Many early-stage bets are under stress. The ecosystem is shifting from hype to discipline.
- For the economy: While many startups continue to create jobs and innovation, a high rate of shutdowns signals structural adjustment and a tougher market environment.
Why the “11,223 startups shut down in 2025” figure is problematic
Despite the claim of “11,223 Indian startups shut down in 2025”, I found no authoritative source verifying that specific number. What is clear is that only 259 startups are reported as shut down in early 2025 so far. Therefore, quoting “11,223” would not be accurate based on current data.
What to watch going forward
- Will 2025 see a full-year closure number that matches or exceeds 2024’s 12,717?
- How many startups will successfully pivot to sustainable models?
- What policy measures will the government or ecosystem players introduce to stabilise the startup climate?
- Which sectors will emerge stronger (e.g., deep-tech, SaaS) compared to those under the most pressure?
Summary
The headline “Indian startups shut down” signals a critical inflection point for the venture ecosystem in India. With over 28,000 closures in the past two years, the boom-era exuberance is being replaced by a more rigorous filter for viability. While this is challenging, many experts view the shake-out as a needed correction—not the death of the ecosystem. The key will be how founders, investors and policy makers adapt to the new normal.
