Building a successful venture requires funding at the right time. And for that, you must know which sectors attract the most venture capital and why.
Thousands of new startups exploring innovative funding options beyond traditional bank loans and angel investments, this insight is foundational to success.
The government, too, has stepped up, directing budgets to support innovation and entrepreneurship.
This article reviews India’s hottest emerging sectors, highlights real examples of thriving companies, and explains the different types of funding they have secured.
We will look at startup numbers, government policies, and the key steps to position yourself for success. Whether you are planning to launch or have an existing business, these insights will help you navigate the dynamic world of profitable startups in India.
Startup funding revolution: An overview
Securing capital has always been a critical milestone for Indian founders, many have emerged, and are turning into profitable startups in India.
This shift comes partly from new fundraising options like crowd funding for startup, specialized government grants, and digital platforms that match investors with innovative projects.
How to raise funds for your startup
It also reflects growing investor confidence in Indian entrepreneurship—both within the country and abroad. Be it a FinTech solution streamlining digital payments or an AgriTech platform boosting farmers’ income, smart business ideas are getting noticed.
In this piece, we will break down the trends, highlight which sectors are raking in the maximum funds, and illustrate how government budgets have fueled various success stories.
2. Startup growth in the last five years
An unprecedented surge
Since 2018, India has witnessed a remarkable boom in startup formations. While official figures vary, industry estimates suggest that over 50,000 to 60,000 new ventures were incorporated during this period, spanning everything from SaaS (Software as a Service) to social enterprises.
A significant chunk of these ventures went on to receive early-stage investments—some from big-name venture capital firms, others through seed funding for startup in India programs.
Regional spread
Interestingly, these startups are not all clustered in Delhi, Bengaluru, or Mumbai. Tier-2 cities are gaining traction too.
For instance, startup companies in Coimbatore have emerged in manufacturing tech, textile innovation, and even AI-driven solutions.
Government-led incubators and local angel networks in smaller cities have propelled such ventures into the spotlight.
Funding snapshot
- Early-stage funding: Seed and Series A deals have grown by an estimated 35% annually, thanks to both domestic and foreign investors.
- Later-stage rounds: Mature startups raised significant growth capital, leading to multiple unicorn announcements between 2019 and 2023.
- Government schemes: Loans, grants, and specialized initiatives have lowered the entry barrier, enabling even first-time founders to dream big.
3. Key emerging sectors
In the push toward profitable startups in India, certain industries have captured outsized attention. Below, we outline five standout sectors, each showcasing real potential for both founders and investors.
3.1 FinTech
Why it is booming
Recently, the Fintech sector has become more digital, opening up new opportunities. Which lead to launching or multiple peer-to-peer lending apps, e-wallets, and automated investment tools.
Recent wins
- Razorpay raised multiple rounds, crossing a $7 billion valuation (as of approximate 2022-23 data).
- Many FinTech startups leveraged the government’s “Digital India” campaign to scale beyond metro areas.
- Innovations in micro-lending have tapped unbanked populations, proving that social impact and profits can go hand in hand.
Government influence
Budget provisions for digital infrastructure and cashless transactions, plus the RBI’s regulations favoring electronic payments, have fueled investor confidence.
3.2 EdTech
Why it is booming
A large young population combined with widespread smartphone use set the stage for EdTech’s rise. The pandemic further accelerated online learning, as schools and colleges switched to digital classrooms.
Types of funding received
- Venture Capital for big player like Unacademy.
- Seed funding for startup in India for smaller, niche platforms focusing on competitive exam prep or local-language content.
- Crowd funding for startup efforts also appeared, especially for social-edtech models reaching remote communities.
Government support
While direct budget allocations for EdTech remain moderate, the government’s emphasis on “Digital Education” in successive budgets has boosted this sector.
Revisions in the National Education Policy also encourage tech-driven learning methods.
3.3 HealthTech
Why it is booming
Healthcare challenges are massive, but so is the scope for innovation. Telemedicine, AI diagnostics, mental health apps—these solutions cater to an unmet demand for more accessible and affordable healthcare across India.
Startup spotlight
- Practo, an early mover in teleconsultations, scaled up rapidly.
- Curefit pivoted from fitness to holistic health, raising sizable growth rounds.
- A new wave of digital pharmacy apps also gained traction.
Government budget impact
National schemes like Ayushman Bharat have spurred digital health solutions. Investors see synergy here: government insurance programs plus private innovation equals a robust ecosystem for profitable startups in India tackling health issues.
World’s Top 10 startup ecosystems
3.4 AgriTech
Why it is booming
Agriculture employs a large chunk of India’s population, but inefficiencies abound—lack of supply chain transparency, outdated techniques, and limited market access.
In the last five years, over 1,500 AgriTech startups (approx.) have cropped up, offering solutions like farm management software, IoT-driven irrigation, and direct-to-farmer marketplaces.
Funding examples
- Ninjacart raised funds to streamline fresh produce logistics.
- DeHaat secured multiple rounds to expand its farm advisory and procurement platform.
- Agritech ventures also tapped government grant for startup programs focusing on rural development.
Budget allocations
Annual budgets increasingly earmark funds for agricultural infrastructure, R&D in farming technology, and digital solutions to boost farmer income.
This synergy between public funding and private investment is a key factor in making AgriTech among the most profitable startups in India for the long haul.
3.5 Green & clean energy
Why it is booming
Climate change, environmental regulations, and consumer awareness have catapulted green startups into the spotlight.
Solutions range from solar panel manufacturing to EV charging stations and waste management tech.
Funding trends
In the past five years, clean energy ventures collectively raised billions in equity and debt financing, supported by the government’s “National Solar Mission” and state-level subsidies for renewable projects.
Potential for growth
As the government sets ambitious targets for renewable capacity, private investors see stable returns in green solutions.
The result is an uptick in profitable startups in India that focus on sustainability, like electric vehicle component manufacturing and battery technology.
4. Government budget and policy support
Over the last five national budgets, the Indian government has made a conscious effort to nurture the startup ecosystem:
- Startup India Program: Allocated a multi-thousand crore corpus, managed by SIDBI, to provide risk capital.
- Tax exemptions: Budget announcements frequently include tax breaks for early-stage startups under certain revenue thresholds.
- R&D incentives: Tech-driven ventures get partial rebates on research expenses, particularly in fields like AI or biotech.
- Agricultural funds: Large sums allocated for farm-related infrastructure indirectly benefit AgriTech, while direct grants help innovators build cost-effective solutions.
By aligning your venture with these policy directions, you increase your chance of attracting both government support and private investor interest.
Related Article:
New-Age Funding Options for Startups In 2025
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Funding types and trends
- Angel syndicates: Collective pools reducing risk for individuals.
- Venture debt: Loans tailored for startups that already show steady revenue.
- Equity crowdfunding: Smaller investors collectively funding early-stage companies.
- Hybrid rounds: Mixing equity, grants, and debt to diversify funding sources.
- Startup investment platforms: Streamlined digital portals bridging founders and investors.
This diversity is a big reason that profitable startups in India are flourishing. They pick funding models that suit their growth stage and sector demands.
6. Examples Of Profitable Startups In India
FinTech: Razorpay
Launched in 2014, Razorpay grew by tapping India’s digital payments wave. It started with seed funding from local angels and soon attracted large VC rounds.
By focusing on user-friendly tech, the company posted profits in certain verticals and scaled internationally.
EdTech: PhysicsWallah
They have come a long way from a Youtube channel to a grand online learning platform. After securing funding, the company was valued at over a billion dollars. Its success stems from a low-cost structure, a large and loyal student base, and carefully designed study materials that target key exam needs.
AgriTech: Ninjacart
With operational roots in Bengaluru, Ninjacart streamlined supply chains for fresh produce, drastically cutting wastage and improving farmer incomes. Funded by multiple VC firms and a large corporate, it is one of the most recognized AgriTech startups.
HealthTech: Practo
Pioneering teleconsultations, Practo overcame early skepticism about virtual healthcare. Steady revenue from subscription-based services to doctors and hospitals eventually led it toward more stable financials.
These examples prove you can achieve scale and sustainability across various sectors, turning your venture into one of the profitable startups in India that sets industry benchmarks.
We Are Here For You
In just five years, India’s startup ecosystem has experienced explosive growth, backed by innovative founders and supportive policies.
Sectors like FinTech, EdTech, HealthTech, AgriTech, and Green Energy stand out for attracting considerable investment—and fostering some of the most profitable startups in India.
Types of funding also evolved, moving beyond simple venture capital to include crowd funding for startup, government grants, and specialized debt products.
At Focusstartup, we are committed to helping you thrive in this dynamic landscape.
No matter which emerging sector you choose, we can work together to turn your innovative idea into a success story. Connect with our team today to know more about it.
For mentorship: Book an appointment with us.
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Does crowd funding for startup actually work in India?
Yes, especially for consumer-facing or socially impactful ideas. However, effective marketing is essential to run a successful campaign.
How does government budget help these sectors?
Policies often include tax breaks, specialized funds, or subsidies that lower operational costs and attract investor interest. AgriTech and clean energy, for instance, benefit from dedicated budget lines.
Can seed funding for startup in India help me scale quickly?
Seed rounds can kickstart your venture, but scaling depends on executing a solid plan. Many startups mix seed capital with later rounds or debt financing to sustain growth.
Rajeev – Digital Evangelist | Startup Consultant | Entrepreneur
With 20+ years in SEO, digital marketing, and data analytics, Rajeev has been instrumental in shaping successful online strategies for global brands. As the former Practice Head – SEO & Analytics at WPP/GroupM India, he led high-impact search and analytics teams for over 14 years.
Beyond corporate leadership, Rajeev is a Startup Consultant & Digital Trainer, helping early-stage ventures scale through digital strategies, investor readiness, and technical consulting. He has also been a lead trainer at Digital Vidya and associated with Bhartiya Vidya Bhawan, where he empowered students with practical digital marketing knowledge.
An early-stage investor, he has backed Bihar-based startups like Mostech Softwares and Delhi Foods. His expertise spans SEO, SEM, media planning, mobile app distribution, and website development, ensuring businesses establish a strong digital presence.
He is also very passionate about his mother place or state Bihar and currently, he is working with local entrepreneurs to ensure more digital and e-commerce penetration and want to take it to the next level.
🚀 Exciting new venture coming soon! Stay tuned.
