New Delhi, March 27 (NationPress) The startup ecosystem in India is witnessing a significant expansion beyond its traditional centers. Currently, over 68,000 startups are based in newly emerging regional hubs, according to a report released on Friday.

The report from Tracxn highlights a maturing funding environment that is producing more profound, conviction-driven investments and occasional substantial outcomes, thereby enhancing the landscape for startups in the country.

Cities including Jaipur, Surat, Indore, Coimbatore, Kochi, and Lucknow are contributing significantly to venture creation. This indicates that growth within these ecosystems is fueled by the strengthening of a few regional nodes, as noted by the research firm.

These ecosystems are largely driven by demand, with notable activity in sectors like edtech, internet-first media, fashion technology, and online grocery services. These industries align well with local consumption patterns and industrial strengths, offering relatively lower capital intensity compared to enterprise software and deep-tech ventures that typically dominate larger startup hubs.

According to predictions, cities like Jaipur, Indore, Kochi, and Surat are evolving to play a more significant role in shaping India's overall innovation landscape.

Nevertheless, the report emphasizes that while startup formation has broadened geographically, funding and exits remain concentrated within a limited number of companies and cities.

The participation in funding has matured over the past decade, although capital deployment continues to be structurally concentrated. From 2016 to 2025, startups outside major urban centers recorded around 2,200 funding rounds and secured approximately $3.2 billion in investments.

“Over time, the size of median funding rounds has increased significantly, indicating a shift towards conviction-led investment strategies. Investors are focusing on fewer startups that demonstrate clearer execution capabilities, resulting in a funding landscape characterized by escalating capital depth but narrowing participation,” the report states.

Seed funding has surged from $27 million in 2016 to $167 million by 2025, highlighting the consistent role of emerging ecosystems as engines of startup formation, according to analysts.

While mega funding rounds exceeding $100 million are still rare, they are crucial, demonstrating that execution-ready platforms can operate on a national or global scale.

By early 2026, two startups based outside the primary clusters achieved unicorn status, showcasing substantial outcomes from regional ecosystems, often following longer and more capital-efficient growth paths. Furthermore, exit activity has seen gradual progress, with 102 acquisitions and 33 IPOs recorded between 2016 and 2025.

“While the formation of startups remains strong and geographically diverse, the next phase of development will rely less on increasing the number of companies and more on enhancing mid-stage funding avenues, talent networks, and institutional support systems,” the report concludes.

aar/rad