When you’re in the driver’s seat of a startup in India’s dynamic ecosystem, it can seem like you’re driving at night with headlights only giving you a few meters of vision. Recent data from NASSCOM shows that nearly 85% of Indian startups still fail within the first five years. So, how do you convert a good idea into a successful business in India’s competitive yet opportunity-rich market?
In this guide, you’ll learn about the different startup stages within the Indian context, how you can master each stage with a community-first approach, who can help you in the Indian ecosystem, and some real-life examples of Indian startups in each stage as of 2025.
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1. Pre-Seed stage
Think of pre-seed as laying the foundation for your company and community within India’s unique market conditions.
This stage is all about fueling ideation and community validation. It’s about testing and analyzing your startup’s opportunities in the Indian market. Your goal is to determine if your product or service can be a viable solution to a real problem faced by Indian consumers, and if your community-first approach resonates with potential users.
In the pre-seed phase, Indian founders should:
- Validate hypotheses for customers, demand and offering across India’s diverse demographic segments
- Build and engage an initial micro-community around your concept, leveraging India’s strong social fabric
- Bring in key stakeholders (i.e. CTO, CFO, CMO, etc.) to convert funding on the idea
- Register key patents and trademarks with the Indian Patent Office
- Test community engagement strategies through prototype interactions, considering regional variations
A startup example in the pre-seed stage: AgroConnect
Founded in late 2024 in Bangalore, AgroConnect is an agri-tech startup that’s creating a community-driven platform connecting small farmers directly with consumers. Its mission is to eliminate middlemen and provide better prices to farmers while offering fresher produce to consumers, all supported by a community marketplace model.
In February 2025, the startup received ₹3.2 crore in pre-seed funding from three investors, including 100X.VC, with a focus on developing their community-centered agricultural ecosystem in Karnataka before expanding to other states.
How to master the pre-seed stage and who can help
According to research by the Indian Institute of Management (IIM) Bangalore, 42% of Indian startups still fail because there’s no market need for their offer. This number increases to 50% for startups that fail to build community engagement early, especially in India’s relationship-oriented business culture.
Talking with and listening to your target audience across India’s diverse regions is crucial. Conduct market research, surveys, and interviews to thoroughly understand your audience’s unique needs and pain points. More importantly, start building your community from day one – create spaces for conversation, feedback, and co-creation with early adopters, leveraging both digital platforms and in-person meetups.
For accurate and thorough market research in India, you’ll need to go beyond your personal investments. This means seeking out funding from initial investors. While you may be eager to approach top-tier VCs, it’ll be nearly impossible to convince them with just a concept.
Instead, pitch your business plan to your personal network, family funds (a common Indian startup funding source), and early community members. Community-first companies in India often find success with micro-investments from their earliest users and advocates. The Indian angel investor network is growing rapidly, with organizations like Indian Angel Network (IAN) and Mumbai Angels offering pre-seed support. Just remember to get everything down in writing, including contracts, funding agreements, and IP protection documents.
2. Seed stage
In the seed stage, you’ve completed initial product and market research across key Indian markets, and it has shown viable demand for your solution. You’ve got more than an idea. You’ve got the data to back up that your offer can be a real solution in the Indian marketplace, and you’ve started building an engaged community around your concept.
Now, it’s time to gain early financial support to turn your idea into a functioning business. This is where seed funding comes in. In this stage, you validate your entire business model and community engagement strategy within the Indian context.
You conduct experiments and carry out market tests to make your product and operations more tangible. The goal here is to validate your initial value hypothesis with a working prototype that your early Indian community can interact with and provide feedback on.
While the pre-seed phase is known as the “idea phase,” the seed phase is known as the “prototype phase” as you need to have a prototype to test. This doesn’t mean you have to have a minimum viable product (MVP) yet—that will come in the early stage.
A startup example in the seed stage: Vyapar Saathi
Founded in 2023 in Mumbai, Vyapar Saathi developed a community-powered platform where small retail shop owners across India can collaborate, share inventory, and access better wholesale pricing through group buying. The idea emerged when founder Priya Sharma witnessed her family’s small retail business struggling to compete with larger chains.
By early 2025, Vyapar Saathi had secured ₹8 crore in seed funding from investors including Blume Ventures after demonstrating strong community engagement metrics and user retention through their beta program in Mumbai and Pune.
How to master the seed stage and who can help
According to 2024 research by TiE Delhi-NCR, 45% of Indian startups failed due to a lack of financing, while 38% failed due to poor community engagement strategies. This is perhaps the toughest stage to master in the Indian ecosystem, where investor expectations are high and competition for capital is fierce.
To master the seed stage, you need to make multiple iterations of your product to create the right market solution for Indian consumers, all while keeping your early community engaged in the process. This is especially true when addressing India’s diverse market segments that often have vastly different needs and price sensitivities.
Think of it as chiseling a basic stone statue down to form a masterpiece, with your community providing feedback on each iteration. This means even more experimenting, market testing, and adjustments to your marketing and community-building strategy across different Indian regions.
In terms of financing, you need to begin connecting with the right people in India’s vibrant startup ecosystem. To succeed in the seed stage, rely on multiple startup funding sources. These include your revenue, angel investors, crowdfunding platforms like Crowdera or Catapooolt, community-based financing models, and accelerators like Startup India Seed Fund, Y Combinator India, or Sequoia Surge. Since your business is still in its initial stages, it’s a major risk for investors. This usually means you have to hand over an equity stake in your business in return.
3. Early stage
The early stage is also known as “Series A.”
If you’ve got this far, hats off to you! According to recent data from India’s Department for Promotion of Industry and Internal Trade (DPIIT), only about 7% of seed-stage startups in India advance into an early-stage startup.
An early-stage startup, or Series A, is typically defined by having achieved a first round of venture capital financing.
Succeeding in this stage is only possible once your company has crafted a minimum viable product (MVP), established a sizable community of users across key Indian markets, and has a steady stream of monthly revenue or strong community engagement metrics.
A startup example in the early stage: Swasthya Sathi
Founded in 2023 in Hyderabad, Swasthya Sathi is a digital health startup that developed a community-centered platform connecting patients with similar conditions across India. The platform combines personalized health tracking with peer support communities moderated by healthcare professionals, with special focus on addressing India’s rising chronic disease challenges.
In January 2025, Swasthya Sathi raised ₹90 crore in Series A funding from investors including Chiratae Ventures and Healthquad, after demonstrating exceptional community retention rates and positive health outcomes among users across major Indian cities.
How to master the early stage and who can help
You have the first version of your product on the market, but it’s not fully refined. Your community is growing across Indian markets but needs structure and enhanced engagement opportunities.
One of the biggest challenges is proving your offer and community can generate revenue beyond the short term in India’s price-sensitive market. You need to perfect your pitch deck and begin focusing heavily on venture capital (VC) firms that value community-centric business models. If you get one of India’s top VCs to invest, they’ll serve as an “anchor,” making it easier to attract additional investors.
Investors want to know what return on investment (ROI) they get with your startup. This is where community metrics become crucial – engagement rates, user-generated content volume, retention statistics, and community-driven conversions are all valuable data points. Incubators and accelerators like T-Hub in Hyderabad, Startup India, or NASSCOM 10,000 Startups are helpful to get you investment-ready and can provide guidance on scaling your community management operations across India’s diverse regions.
4. Growth stage
If you’ve made it past the early stage, chances are, your business is going to make it in the Indian market.
You’ve likely raised substantial capital, proven that your offer has market demand across multiple Indian regions, built a thriving community, got a growing customer base, and perhaps received offers to purchase your business.
It’s time to focus on growing your startup nationally and scaling your community. To do that, you secure Series B and C investments.
A startup example in the growth stage: Krishi Unnati
Founded in 2022 in Pune, Krishi Unnati developed a community marketplace for organic farming products where farmers can connect directly with consumers across India. What makes them unique is their community accountability model, where users collectively validate organic farming claims and practices.
In March 2025, the startup received ₹500 crore in Series C funding from five companies, led by Lightspeed India Partners and participation from international investors like SoftBank.
How to master the growth stage and who can help
More funding than before is essential to scale your business across India’s vast market, expand your community infrastructure to new regions, and maintain long-term profitability despite regional variations.
Venture capitalist firms like Sequoia India, Accel India, and Blume Ventures are still at the forefront of your growth-fueling funding. Investment banks, private equity firms like Multiples Alternate Asset Management, and hedge funds might start to take interest in your company, too.
One major part of the growth stage is scaling your team and community management operations. You need the right people in the right places across India’s diverse regions. This includes hiring regional community managers who understand local languages, cultures, and business practices.
Scaling a company in India is a highly strategic endeavor. Scaling up too quickly could mean burning through your resources faster than revenue comes in, especially in a market where monetization can be challenging. If you scale too slowly, you risk not being able to supply growing demand or fail to meet deadlines.
As a founder, you can’t wear all the hats anymore. You have to lean on the right people, including experienced Indian startup mentors and advisors from organizations like TiE or NASSCOM, to reach the next stage.
5. Expansion stage
The next stage (and final stage for many Indian founders), is the expansion stage. You’re already profitable and self-sufficient in your core Indian markets. Many people will no longer consider your business a startup. With the greater market in mind, your goal is to expand further across India and potentially into international markets.
A key indicator that you’re in the expansion stage is if you’ve managed to grow more than 20% annually for three consecutive years (in billing or employee count). At this point, your startup becomes a “scaleup,” according to global standards.
A startup example in the expansion stage: EduSakha
Founded in 2019 in Bangalore, EduSakha created a community-driven edtech platform that connects students with peer tutors and professional educators. Starting with a focus on engineering entrance exams, the company has since expanded to cover all major educational assessments in India.
By 2025, EduSakha had successfully expanded to all major Indian cities and began entering Southeast Asian markets, starting with Singapore and Indonesia. The company also diversified its offering by acquiring TechPrep, a Mumbai-based coding education startup, for ₹120 crore in January 2025.
How to master the expansion stage and who can help
In the expansion stage, you likely venture into additional Indian markets beyond tier-1 cities, expand internationally to markets with similar dynamics (like Southeast Asia or the Middle East), or expand by offering different products or services in other market segments.
You can also start considering acquisitions to accelerate expansion and take up a greater market share. India’s startup ecosystem has matured significantly, with several companies making strategic acquisitions to consolidate their position.
To tap into expansion, Indian startup founders and executives typically seek outside counsel such as startup mentors and other founders who have gone through the expansion phase themselves. Organizations like CII (Confederation of Indian Industry) and FICCI (Federation of Indian Chambers of Commerce & Industry) often connect scale-up founders with experienced business leaders. The further you go through each stage, the more you must rely on help, guidance, and strategic partnerships to fuel business growth.
6. Exit stage
We’ve heard of the final startup stage many times before: “The Exit.”
This stage is optional and is oftentimes presented to founders naturally, though exit opportunities in India are still evolving compared to more mature markets like the US.
The foundation for a proper exit starts early: The values and assets you build will define the price of your venture. The relationships you foster will contribute to the trust that potential buyers have in you. Mastering “The Exit” depends on your goals. If the opportunity for an exit arises, the first critical decision is to determine whether you continue expanding your current business venture. It’s essential to assess the state of your startup and your own aspirations carefully.
There are three main ways to exit in India:
- Sell founder’s shares to another company or investors
- Get acquired by another company (domestic or international)
- Initial Public Offering (IPO) on Indian exchanges like NSE or BSE
A startup example in the exit stage: HealthyCart
Founded in 2016 in New Delhi, HealthyCart developed India’s first community-curated health foods marketplace, connecting health-conscious consumers with verified organic food producers across the country.
In late 2024, the company was acquired by one of India’s largest FMCG companies for ₹1,200 crore, representing one of the largest acquisitions in India’s health food sector. Today, HealthyCart continues to operate as a subsidiary while leveraging the parent company’s vast distribution network.
How to master the exit stage and who can help
Successfully navigating “The Exit” stage requires planning and the right support, especially in India’s evolving startup ecosystem. To master this stage, consider the following steps:
Define Your Exit Strategy: Start by outlining your goals and the outcomes you wish to achieve with your exit. Determine whether you want to sell founder’s shares, get acquired, or go public through an IPO. The choice should align with your long-term vision and the values your startup represents.
Build Valuable Relationships: Recognize that the groundwork for a successful exit in India is often laid well in advance. Cultivate valuable relationships in your industry and establish trust with potential buyers or investors. These connections can significantly impact the outcome of your exit, especially in India’s relationship-driven business environment.
Timing Is Key: Acknowledge that the timing of your exit is crucial. Market conditions and investor sentiment can significantly affect the success of your exit. Stay attuned to India’s economic cycles and policy changes that might impact your industry.
Legal Support: Engage a team of experienced lawyers who specialize in mergers and acquisitions, IPOs or other relevant areas, with specific experience in Indian regulatory frameworks. Legal professionals can ensure that your exit proceeds smoothly, all regulatory requirements are met, and your interests are protected throughout the process.
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