India Records 729 Startup Closures, New Foundings Slow

Data from market intelligence platform Tracxn shows that 729 startups shut down in 2025, down from 978 a year earlier, Storyboard18 reported. While closures have declined, the bigger signal is a sharp slowdown in new company formation. Nearly 19,000 startups were founded in 2020 at the peak of pandemic optimism; by 2025, that number had collapsed to just 978 as founders and investors pulled back.

The hardest-hit sectors mirror where enthusiasm once ran highest. Enterprise applications saw the most shutdowns between 2020 and 2025, followed by retail and edtech—areas that boomed during rapid digital adoption but struggled once demand normalised. Consumer-facing startups were especially vulnerable: since 2020, almost 14,000 B2C firms have closed, around 72% more than B2B companies, weighed down by high acquisition costs, weak loyalty, and funding-dependent models.

Several high-profile failures in 2025 highlighted deeper issues. Governance lapses brought down BluSmart; aggressive acquisitions overwhelmed Good Glamm Group; regulatory changes shuttered Hike and CrickPe; and capital-intensive EV and commerce plays like Altigreen and BeepKart ran out of runway. Even younger startups failed to survive.

Together, these shutdowns signal a reset—away from growth-at-all-costs toward governance, capital discipline, and sustainable business models.