Annual start-up incorporations in India have seen an exponential rise in the last decade having moved from about 10,000 in 2016 to around 30,000 annually between 2020–2025, according to a report titled ‘2016-2025: The Startup Decade – The Making of a Bold and Powerful India’ published by the Centre for Research on Start-ups and Risk Financing (CREST) at the Indian Institute of Technology Madras.

Overall start-up count grew from 10,000 in 2016 to 250,000 by 2025, an increase of 23x, while funded start-ups jumped from 2,000 to 75,000 (36x increase).

According to the report, the decade also saw an increase in the formalisation of the start-up ecosystem with 79 per cent of all of the country’s start-ups now recognised by DPIIT as against only 3 per cent in 2016. 

As for the founder base, 24 per cent of the start-ups are led by women founders. The share of women founders  increased from about 5,800 in 2017 to 18,700 in 2025, a 14% CAGR growth indicating gradual cultural and institutional change rather than a sudden shift.

In terms of the geography of founders, In 2016, Tier 1 cities had accounted for 6,900 start-ups vs just 1,600 in Tier 3. By 2025, Tier 3 surged to 26,100 start-ups, far exceeding Tier 1’s 6,600. Parallelly, districts with zero start-ups dropped from 276 to just 59.

The report also added that high start-up counts are concentrated in sectors like Food & Beverage, Construction, and Healthcare linked to urbanisation and consumption. But funding is dominated by digital sectors—E-commerce, FinTech, SaaS, AI.

“Certain communities, traditionally strong in business, continue to demonstrate remarkable entrepreneurial drive and success in the start-up arena. The report presents the nation’s first-ever comprehensive league tables for top incubators, VCs, banks, and DeepTech investors. These resources will serve as critical guides for founders seeking support, investors identifying key partners, and policymakers refining ecosystem strategies, offering unprecedented transparency and insights into who is truly fuelling India’s start-up engine,” said Thillai Rajan, Professor, Department of Management Studies, IIT Madras, and Head, CREST.

Despite the encouraging number of start-ups, the report however flagged challenges within India’s start-up incubation system. Only about 25,000 or less than 10 per cent of the total start-ups in the country receive incubation support, it said.

Meanwhile, among the 840 incubators that the report classifies as ‘weak ecosystems,” only 17 per cent of supported start-ups get funded. In contrast, 207 strong ecosystems show ~70% median funding conversion. 

As for the employment impact, job creation is distributed, not concentrated in large firms. Large start-ups with over 500 employees contribute only 4.7 per cent of jobs.  

Published on April 30, 2026