VC funding in Indian startups declines 42% YoY in July

The Indian startup ecosystem continues to face the problem of a slowdown in enterprise capital (VC) funding as July noticed the bottom quantity raised on a month-to-month foundation for the 12 months until now. This was primarily because of the absence of large-value offers.

The full funding for July 2025 was $621 million. In comparison with $1,074 million in July final 12 months, the decline was 42 per cent, in accordance with YourStory Analysis. The dip was 41 per cent from the funding within the previous month i.e., June 2025.

The quantity of VC funding raised by the Indian startup ecosystem for July has been the bottom for the 12 months until now. The second lowest quantity raised for the 12 months was in February when the quantity was $669 million.

July has been fairly lacklustre for Indian startups when it comes to VC influx. Even on a weekly foundation, the overall quantity raised was simply hovering across the $100-million vary. This slowdown in funding is basically as a result of absence of large-value offers; July didn’t witness even one transaction with a deal worth of greater than $50 million.

It’s the giant worth offers that make all of the distinction to the funding quantity. Any change on this parameter has a bearing on the general fund movement.

Nevertheless, July additionally had a shock—when it comes to the variety of offers. The full variety of offers was 102 in the course of the month in comparison with 91 in June, though the overall funding raised was decrease. This reveals that the variety of offers just isn’t as essential a benchmark because the presence of high-value offers.

The primary seven months of the 12 months noticed VC funding on a month-to-month foundation crossing the essential threshold of $1 billion solely thrice—in March, Could and June.

These developments don’t augur properly for the Indian startup ecosystem, and given the pattern within the first seven months of the 12 months, VC fund increase is unlikely to cross the $13.2 billion recorded in 2024.

Throughout July this 12 months, the early-stage funding class raised the very best quantity at $262 million, throughout 79 offers, adopted by the late-stage startups. This has been the pattern for the final two years or so, whereby the early-stage class will get the very best traction when it comes to variety of offers however the worth of such transactions stays low.

Among the many sectors that acquired the very best funding in July, the fintech section topped the listing, adopted by cleantech and D2C. The fintech section has persistently maintained its place because the primary class receiving the very best investor curiosity.

The three key cities of Bengaluru, Mumbai and Delhi-NCR took the highest three positions when it comes to VC funding. This has been the pattern for a very long time. Different cities corresponding to Chennai, Hyderabad and Pune haven’t reached the extent of VC funding of those three areas.

Total, the atmosphere continues to stay gloomy because the unsure macro financial atmosphere has made traders cautious whereas investing in startups. The appearance of synthetic intelligence has added to the uncertainty—traders are in a wait-and-watch mode with regard to how this know-how will play out, main them to carry onto their cheques.