Stable Startup Ecosystem Despite 6,385 Closures
Of the total recognised startups, 6,385 have been categorised as closed, according to Ministry of Corporate Affairs (MCA) records updated on 11 November 2025. These closures include entities dissolved or struck off and are spread across all states and union territories.
The government has clarified that it has not observed any unusual rise in startup shutdowns. Instead, closures are influenced by natural market factors such as business viability, funding availability, competition, and evolving economic conditions. Karnataka, Maharashtra, Delhi and Gujarat reported the highest number of closures consistent with their status as major startup hubs.
Funding Support Through Three Major Schemes
To accelerate early-stage and growth-stage innovation, the government continues to operate three major financial support schemes under Startup India: the Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS). These schemes collectively aim to strengthen capital access, incubation support, and credit availability.
Fund of Funds for Startups (FFS)
Established with a corpus of ₹10,000 crore, FFS is managed by SIDBI and channels funds into SEBI-registered Alternative Investment Funds (AIFs), which subsequently invest in startups. Between 2023 and 2025, AIFs received significant commitments and disbursements, with Maharashtra, Karnataka and Delhi leading in capital flow. In 2025 alone, AIFs were committed ₹850 crore, with ₹879.57 crore drawn down as of 31 October.
Startup India Seed Fund Scheme (SISFS)
The ₹945-crore SISFS supports seed-stage startups through accredited incubators. The scheme has approved substantial amounts for incubators across states, with Maharashtra, Tamil Nadu, Karnataka and Gujarat remaining major beneficiaries. In 2025, incubators received ₹42.3 crore in approvals and ₹94.6 crore in disbursements.
Credit Guarantee Scheme for Startups (CGSS)
Operational since 2023, CGSS enables collateral-free loans for startups via eligible financial institutions. In 2025, loans worth ₹153.4 crore were guaranteed up to October. Maharashtra, Gujarat, Karnataka and Uttar Pradesh received the largest guarantee support, indicating robust credit demand among emerging businesses.
Building a Stronger National Innovation Network
Since its launch in 2016, Startup India has expanded into one of the world’s largest startup support frameworks. The DPIIT recognition mechanism offers benefits such as easier compliance, tax incentives, faster patent processing, and access to government schemes.
