India’s Startup Spring, Dream11 Pulls Out, and Smartworks IPO Gets Green Signal

For nearly two years, the phrase “funding winter” dominated India’s startup headlines. Deals slowed, valuations cratered, and layoffs mounted. But what we are seeing now isn’t a thaw - it’s a deeper correction that deserves a better metaphor. Call it a “funding spring”: harsh, unpredictable, often brutal, but laying the groundwork for real growth. The chaos forced a change. The industry now values making a profit over simply appearing to be successful, and superficial numbers are no longer respected.

The contrast with 2021 is stark. Back then, Tiger Global and SoftBank were showering capital on blitzscaling startups, underwriting the myth that market share was all that mattered. By 2024, that model collapsed. Companies like MobiKwik had to slash valuations by nearly 70% to go public, while Swiggy’s ₹11,327 crore IPO came at a discount to Zomato’s, reflecting public market skepticism about its negative EBITDA margins. Ola Electric’s blockbuster listing raised over ₹6,145 crore, but its shares fell sharply post-listing - an unmistakable signal that the public market won’t bankroll hype without fundamentals.

The discipline is bleeding into private markets too. In 2024, 13 tech startups went public, raising over ₹29,200 crore. But the IPO rush wasn’t about exuberance; it was about necessity. With crossover funds pulling back, public markets became the only liquidity option. And unlike private investors, the markets are merciless. They forced startups to accept down-round valuations and demonstrate paths to profitability in real time.

The human toll has been immense. Between 2023 and 2024, more than 28,000 startups shut down, with casualties concentrated in high-burn sectors like edtech, agritech, fintech, and healthtech. Layoffs topped 21,000 in H1 2023, though they fell to 10,000 in H1 2024 as companies “right-sized” their operations. Unicorns like Byju’s, ShareChat, and Ola cut thousands of jobs, while Flipkart, Swiggy, and InMobi followed suit in 2024. Yet, paradoxically, this culling signals that the worst excesses are over. Survivors are stronger, leaner, and in some cases, profitable. Oxyzo, for instance, posted ₹340 crore in profit on ₹1,207 crore in revenue in FY25 - a milestone that would have been dismissed as boring in 2021, but is now celebrated.

The parallels to the global dot-com bubble are impossible to ignore. The same psychology was at play: “get big fast,” vanity metrics like DAUs and GMV, and the “greater fool theory” of investors betting that someone else would pay a higher valuation. But unlike the dot-com crash, India’s correction has been gradual, cushioned by strong macro tailwinds. GDP growth of 8.2% in 2024 and the backbone of Aadhaar, UPI, and Digital India have given startups a foundation no dot-com had. What could have been a wipeout became a controlled burn.

Funding patterns also reveal the shape of the future. AI and deep-tech have doubled funding inflows to $324 million in H1 2025, with AI alone attracting 87% of all deep-tech capital. SaaS, long the darling of Indian VC, is being reconfigured as “AI-first SaaS.” Fintech, which absorbed over $20 billion in the past five years, has slumped to its lowest funding in half a decade, while e-commerce and retail saw resilience with $1.2 billion raised in H1 2025. This “flight to quality” is not a cliché; it’s a reality of capital concentration in defensible models.

We think that near-term will remain choppy. Down rounds will persist, early-stage capital will stay scarce, and founders will continue trimming ambitions to survive. But the long-term vision is clear: India is shifting from unicorn factories to building enduring companies. IPO pipelines remain strong. Hiring intent for freshers in tech and e-commerce is at 88%, signaling the ecosystem’s need for talented individuals.

This is the essence of the “funding spring.” It is not a return to easy money but the birth of a more mature, disciplined ecosystem. This change means investors must swap "spray-and-pray" for a clear strategy, and founders must recognize that sound unit economics are no longer a nice-to-have, they are a necessity.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Idhar Zeher Khane Ke Paise Nahi Hai”: Dream11 Pulls Out As Team India’s Lead Sponsor After New Gaming Law

Dream11 has bowed out as Team India’s lead sponsor after Parliament passed a new law banning real-money gaming platforms.

With the Asia Cup around the corner, the BCCI is scrambling to find a new jersey sponsor. Luckily for Dream11, its contract shields it from penalties since the exit stems from government regulation.

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“Kya Re Dedh Shaane”: In Smartworks IPO Case, SC Dismisses NGO Infrastructure Watchdog’s Plea

The Supreme Court has thrown out a plea by NGO Infrastructure Watchdog against Smartworks’ IPO, after finding the documents it submitted were fake. The bench didn’t mince words, warning the NGO of “serious consequences” if it tries to mislead the court again.

The watchdog had alleged shady funding and disclosure gaps, but with the case dismissed, Smartworks gets a clear runway for its listing.

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“Kranti Ki Nayi Lahar”: Mooving Cofounder Launches AI Venture TrusTerra To Power India’s Used EV Market

Mooving cofounder Tanvir Singh has rolled out a fresh venture, TrusTerra, to bring AI smarts to India’s booming used EV market.

Joined by three cofounders, the startup wants to crack 1 million pre-loved EV deals in the next 3-5 years. With expansion plans across Bengaluru, Pune, and Hyderabad, TrusTerra is betting big on powering India’s second-hand green wheels.

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“Sapne Dekhe Bade Bade”: OYO To File IPO Papers In November, Targets $7-8 Bn Valuation

OYO is gearing up to finally file its IPO papers this November, eyeing a hefty $7-8 billion valuation.

The board is expected to review the plan soon, while major backer SoftBank is already sounding out banks on market appetite. If all goes well, OYO’s long-delayed public debut could be just around the corner.

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“Suswagatam Suswagatam”: Jio’s Sajith Sivanandan To Take Over As Tata Digital CEO

Tata Digital has found its new captain in Sajith Sivanandan, ex-president of Jio Mobile Digital Services, will step in as CEO from September 1.

The move marks a big leadership shift for Tata Sons’ ecommerce arm as it sharpens its digital play. With Sivanandan at the helm, Tata Digital is betting on fresh momentum in India’s crowded online marketplace.

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1. Altum Credo has bagged ₹170 Cr from British International Investment to scale its affordable housing finance play. The funds will boost tech infrastructure and widen credit access for low-income, largely women borrowers across India.
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2. Fintech startup Kiwi has raised ₹209 Cr in a Series B round led by Vertex Ventures to push UPI-linked credit cards into the mainstream. Backed by Nexus, Stellaris, and Omidyar, the fresh funding comes two years after its $13 Mn Series A.
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3. WizCommerce has secured $8 Mn led by Peak XV Partners to supercharge its AI-powered B2B sales platform. The startup will use the funds to expand teams in India and the US while streamlining operations for wholesalers, distributors, and manufacturers.
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4. Hyderabad-based Enmovil has raised $6 Mn in a Series A round led by Sorin Investments, with Capria Ventures and Twynam also participating. The AI-driven supply chain startup will channel the funds into scaling sales, boosting AI capabilities, and exploring global markets.
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5. Palmonas has secured ₹55 Cr in a Series A round led by Vertex Ventures SEAI to scale its demi-fine jewellery brand. The funds will fuel store expansion, new collections, and a push to make demi-fine jewellery a household name in India.
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6. Wastelink has raised $3 Mn in Series A funding from Avaana Capital to scale its food upcycling platform. The startup will use the funds to expand nationwide, strengthen R&D, and build tech for resilient animal feed supply chains.
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7. Harajuku Tokyo Cafe has raised $2 Mn in a seed round led by Indian Angel Network to scale its Japanese QSR chain. The funds will drive India expansion and international forays, with franchise talks already underway in the UAE.
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8. Luxury handbag brand AKINNA has raised its maiden undisclosed funding round led by Zeropearl VC to scale production and expand its team. The funds will also fuel brand-building efforts, with Zeropearl VC’s Bipin Shah joining the board.
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