In start-up world quiet isn’t necessarily dull

They say the Indian startup ecosystem has grown up. On the surface, the numbers appear to support this story. In just the first three months of 2025, around $3 billion made its way into India’s tech startups, marking an increase from last year. Money, it seems, is flowing again. This sounds promising.

Now here’s the twist. Not a single new unicorn, those young billion-dollar startups that once made daily headlines, was born during this period. Not one company managed that flashy leap to join the exclusive unicorn club. A year ago, there were at least two that did. The sparkle, the excitement, the unicorn-mania that captured everyone’s imagination seems oddly absent. It begs an obvious question: if the money is indeed flowing, why isn’t it creating these headline-grabbing companies?

Instead, what’s making news now are acquisitions—big companies quietly buying smaller, younger ones. There were 38 such deals in this quarter alone, almost 41% more than the same time last year. These weren’t minor exchanges either. By way of examples, Hindustan Unilever spent $350 million to acquire Minimalist, a skincare brand that built itself on Instagram popularity and sleek packaging. Or DS Group that partnered with Patanjali to buy Magma General Insurance for over half a billion dollars. These are serious sums, and signal a shift.

This shift, many analysts argue, indicates that India’s startup scene is consolidating—maturing, even. But there’s a deeper question here: Is this what maturity truly looks like? Or is it simply that investors have grown cautious, no longer willing to pour money into every idea that mentions “AI,” “cloud kitchen,” “Electric Batteries” or “digital-first” in its pitch?

Gaurav Dua, Head of Capital Market Strategy at Mirae Asset Sharekhan, though has a different perspective. Dua thinks what’s happening now is a pause, a chance to catch breath after years of hyperactivity. Investors, he says, are recalibrating. They’re checking if the startups they backed in earlier rounds actually deliver what they promised. If earlier, the market was fuelled by limitless optimism and endless promises, today it’s being tempered by realism.

Dua argues this slowdown is essential, a natural consequence of recent excesses. It isn’t a sign of weakness, but proof that the market is becoming selective. And being selective is good. It means investors now favour ideas that show clearer paths to making actual money.

But why have investors suddenly become cautious? Dua has a simple yet profound explanation: the world feels less certain right now. Economic turbulence globally, geopolitical anxieties, and markets swinging unpredictably have made risk-taking less appealing. Investors, having pocketed substantial profits from earlier investments, now prefer the security of holding onto their cash a bit longer. They want to see if the startups they’ve previously supported can grow steadily, instead of placing new bets that might never pay off.

Then there’s another practical issue Dua points out. Investors are seeing the same ideas repeated far too often. How many similar consumer brands, delivery apps, or so-called “AI-powered” solutions can one market sustain? Dua suspects the term “AI” has become little more than decoration in a trendy new coat. But investors no longer want buzzwords; they want real earnings.

That explains why the money has shifted away from very early-stage startups, where ideas are still raw and uncertain. In fact, investments at these stages have dropped significantly—more than 50% compared to the previous year. Investors now prefer to put their money into older startups—those that have already proven their concept and can show clear paths to profitability. To that extent, there’s no stifling of innovation, The money is ensuring the market doesn’t get flooded with fragile ventures built on hype.

Take Minimalist again. By joining Hindustan Unilever, it gets access to resources and distribution networks it could only dream of on its own. Hindustan Unilever, on the other hand, gains a youthful, digitally-savvy brand it couldn’t build quickly by itself. Similarly, Patanjali and DS Group buying Magma General Insurance lets them tap into the growing insurance market without starting from scratch. It’s not about destroying creativity, but about placing promising businesses into safer hands.

So, perhaps the current lack of unicorns isn’t such a bad thing after all. Perhaps it’s even healthy—a period of quiet strength-building before the next leap forward. Dua would certainly argue that India’s startup market hasn’t lost its potential. It’s simply catching its breath, tidying up after a frantic party that lasted years.

What lies ahead isn’t the absence of excitement but a different kind of energy. Less frantic, more thoughtful. The glamour of unicorns might momentarily dim, but their absence doesn’t signify decline. Instead, it signals maturity that favours lasting strength over flashy headlines. And maybe, as Dua quietly suggests, that’s precisely what the Indian startup world needs right now.