Startup Ecosystem’s trend is changing: more than 28,000 startups have been closed in two years

Ahmedabad: The world’s third largest Indian startup Ecosystem has set an incredible record. More than 28,000 startups have been closed in the last two years. Of which 15,921 startups in 2023 and 12,717 startups in 2024 will be closed. Some of them have applied for bankruptcy.

According to data intelligence platform Traxon, this is 12 times the 2,300 shutdowns in the last three years-2019-2022. More than 9,600 startups were launched between 2019 and 2022, which would be reduced to only 5,264 in 2024.

So far only 125 startups have been launched so far this year. Experts consider this trend as a result of ‘delayed improvement’ or calibration rather than the failure of the ecosystem.

In 2021-2022, a new flow of capital was seen in the startup sector. Many companies received funding in the product-pre-market-corresponding phase. Many companies also raised capital on high evaluation, due to which they failed to raise follow -up investments.

According to sources, areas where the most prisoners have been observed include Agritech, Fintech, Edtech and Healthtech. These startups failed on a large scale because the initial capital investment in them was very high, due to which cash was excessive use and the mentality of development was adopted at all costs.

One of the major causes of failures was the lack of a long -term viability of the business model or the ability to adapt with emerging market dynamics.

There have been only 259 shutdowns so far in 2025, but experts hope that this number will increase. Lack of meaningful consolidation is the slow speed of acquisition and another reason for closure in large numbers. The number of startup acquisition has come down from 248 in 2021 to 131 last year.

A look at the startup ecosystem

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