Indian startup funding plummets below $600 Mn in July: Entrackr Report

Startup funding activity in India fell to its lowest point this year in July, with a 38% decline month on month from $960 million in June to just $598 million. The absence of any $100 million plus deals highlighted the cautious sentiment among investors. Notably, without a couple of pre-IPO rounds and large checks for India cum US-based startups, the total would have been closer to $400 million. Despite the sluggish funding inflow, July brought good news on the public markets front as two startups made their stock market debut and more than six filed DRHPs, showing a clear gap between weak private funding and a strong IPO pipeline.

According to data compiled by TheKredible, Indian startups raised a total of $598 million across 105 deals in July. Growth and late-stage funding accounted for $368 million from 19 deals, while early-stage funding contributed $230 million through 70 deals. Additionally, 16 rounds of funding remained undisclosed.

[M-o-M and Y-o-Y trend]

Indian startup funding showed month on month fluctuations in 2025 with a clear downward trend as the year progressed. Funding started strong at $1.76 billion in January then dropped to $802.72 million in February. It rose slightly above $1 billion in March and May. April and June saw moderate falls. July hit the lowest point so far at $597.62 million. The year-on-year data for July also shows a sharp decline in both the number of deals and funding for Indian startups.

[Top 10 growth-stage deals]

July saw the top 10 growth stage deals among Indian startups led by Safe Security with $70 million in Series C, followed by Gupshup with $60 million in Series F. Workspace providers IndiQube and Smartworks raised $44 million and $20 million respectively at the pre IPO stage. AppsForBharat and Truemeds brought in $20 million each with their Series C and Series B rounds. Fintech firms Navi, Varthana, and Credit Wise Capital secured notable investments, while Khetika from the foodtech sector raised $18 million.

[Top 10 early-stage deals]

July’s early stage deals in Indian startups saw QpiAI lead with $32 million in Series A, followed by Composio with $25 million at the same stage. Netrasemi secured $12.5 million, while Kluisz.ai took $10 million in seed funding. AI platform Metaforms and gaming player STAN each closed $9 million. InPrime Finserv raised $6.02 million, EduFund followed with $6 million, EVeez brought in $5.40 million and Enlite closed with $5.32 million. These deals showed strong investor interest in deeptech, AI, fintech, edtech, and electric mobility in early stage funding rounds for July.

[Mergers and acquisitions]

Udaan’s acquisition of ShopKirana marked one of the key deals this July, along with Zaggle’s move for Rio.Money in fintech and Desi Farms’ takeover of Suruchi Dairy in the consumer space. Beyond these headline transactions, the month featured a series of mergers and acquisitions in sectors like SaaS, healthtech, AI, and HRTech. Check TheKredible for more details.

[City and Segment wise deals]

Bengaluru continued to dominate the Indian startup funding landscape in July, pulling in $339.7 million across 39 deals and accounting for more than half of the total capital raised. Delhi-NCR followed at a distant second with $130.25 million from 24 deals, while Mumbai saw 15 startups collect $71.58 million. Ahmedabad and Hyderabad saw more muted activity, raising just $9.99 million and $10.5 million respectively. 

AI led the way in July with 16 deals raising $128.35 million and accounting for the biggest share of funding among Indian startups. Fintech followed with $81.42 million across 8 deals, while deeptech saw $42.58 million from 8 deals. E-commerce and healthtech recorded $36.16 million and $32.52 million respectively, with both segments trailing in deal value despite solid activity.

[Series-wise deals]

Series A led funding activity among Indian startups in July, drawing $154.44 million across 17 deals and securing the largest share of capital raised at the early growth stage. Seed rounds remained active with 38 deals worth $63.06 million, followed by pre-Series A at $31.38 million through 16 deals. Debt funding brought in $59.8 million from five transactions as startups sought alternative capital options. Pre-seed checks added $7.86 million across 10 rounds. Check TheKredible for more details.

[Layoffs, shutdowns, key hires, and departures]

While direct layoff activity has decreased in July, with the notable exception of Ola Krutrim which reportedly fired over 100 employees, the startup ecosystem saw around half a dozen shutdowns including Blip, Ohm Mobility, Astra and others in the past month. These closures could have resulted in hundreds of additional job losses. During the first half of the year, total layoffs in startups stood at 1,000.

In July, the startup ecosystem experienced only a few departures. Simultaneously, more than 26 key executive positions were filled, signaling a wave of transformation. For a detailed overview of these changes, click here.

[Trends]

Agritech fails: An Entrackr report recently highlighted that agritech funding has declined over the past five years, making up only 2% of total venture funding. This trend persisted in July, with just a single deal recorded in the agritech segment.

Quick fashion rise: Venture capitalists have shown strong interest in quick fashion delivery startups, which are gaining momentum. In July, five deals were closed in new age fashion-related startups while Reliance also entered the space with Ajio Rush.

Founders back their startup before IPO: A new trend shows Indian startup founders investing heavily in their companies before IPOs. Lenskart’s Peyush Bansal bought shares worth Rs 222 crore, Amagi’s founders acquired shares worth Rs 9 crore, and Zetwerk’s promoters plan to invest Rs 600 crore. These moves signal strong founder confidence ahead of listing.

Co-working IPO boom: The co-working space sector in India is seeing a surge in IPO activity. After Awfis, Smartworks and Indiqube have listed recently and WeWork India received SEBI approval. Other managed office startups are also planning listings, reflecting strong investor interest and growth in this segment.

Startups face regulatory heat: The Enforcement Directorate (ED) has stepped up investigations into Indian startups in 2025, targeting sectors like gaming, fintech, and e-commerce. Companies such as Probo, Myntra, and Simpl face probes over alleged FDI and forex violations. The crackdown raises compliance risks for the startup ecosystem.

[Conclusion]

The disappointing drop in agritech interest, the higher interest in quick fashion delivery, or even the search for high potential Indian AI firms show a market that is still struggling to seek big enough problems to solve. Agritech’s stop start fortunes are truly disappointing, considering the sheer scale of the sector and prospects there. The missing link is of course freedom to operate and perhaps, purchasing power, but if ever there was a case for a contrarian bet, it would have to be agritech now.

The mismatch between successful IPO’s and funding simply cannot last, and at some stage, we will see a correction this year with more, larger deals for startups, unless the rising Indo-US trade tensions stifle some plans for now. It is safe to say that despite the solid experience with Caratlane and even Bluestone, spaces and gems and jewellery will struggle going ahead. As will services, especially if they are outward focused. Political decisions over the quarter will set the tone for a lot of investments now unfortunately, and it remains to be seen if the right long term calls are made.