Venture capital (VC) funding in Indian startups has been facing significant challenges in the month of July 2025, with a notable decline in investments. The week from July 5-11 saw a substantial drop in funding, signaling continued uncertainty in the startup ecosystem. For the second week of July, the total VC inflow stood at just $100 million, a sharp contrast to previous weeks. This decrease reflects the overall downward trend in VC investments, making it more difficult for startups to secure funding in the current macroeconomic environment.
VC Funding Decline in Indian Startups
The decline in venture capital funding for Indian startups continues to intensify in July, with the second week marking a major dip. With only $100 million raised across 18 deals, this week’s funding figure is one of the lowest in 2025, further emphasizing the cautious approach investors are taking in the current market conditions. Compared to the $259 million raised in the first week of July and the $374 million raised in the final week of June, this downward trend paints a worrying picture for the future of startup funding in India.
The lack of high-value transactions and fewer deals being struck are contributing factors to this slowdown. The limited number of deals in sectors like fintech and early-stage funding is further highlighting the uncertainty surrounding Indian startups.
Key Transactions in July 5-11 Funding Week
Despite the overall decline in VC investments, some startups managed to secure significant funding during the week. Here are a few notable transactions:
- Credit Wise Capital: This NBFC raised Rs 200 crore ($23.3 million) from Trident Growth Partners.
- Varthana Finance: This finance company secured Rs 159 crore ($18.5 million) from BlueEarth Capital, ResponsAbility, and Franklin Templeton Alternative Investments.
- Khetika: A food brand, Khetika raised $18 million from Narotam Sekhsaria Family Office, Anicut Capital, Incofin India Progress Fund, and other investors.
- Arteria Technologies: A SaaS startup, Arteria Technologies raised Rs 100 crore ($11.6 million) from ICICI Venture.
- InPrime Finserv: This NBFC secured Rs 50 crore ($6.02 million) from Pravega Ventures, Z47, InfoEdge Ventures, and Kettleborough VC.
- Chai Bisket: A digital content studio, Chai Bisket raised $5 million from InfoEdge Ventures, General Catalyst, and angel investors.
- Belong: A fintech startup, Belong raised $5 million from Elevation Capital, Relentless Ventures, and angel investors.
- Yulu: An EV mobility startup, Yulu raised Rs 25.7 crore ($2.9 million) from Magna International.
The Future of Venture Capital Funding in India
The VC landscape for Indian startups remains uncertain. The decline in funding can be attributed to a mix of economic instability, cautious investor sentiment, and a slowdown in high-value deals. Early-stage startups have seen more traction than their growth-stage counterparts, indicating that investors are opting for more secure, smaller-scale investments.
The challenge now lies in how Indian startups can navigate this funding drought. With the macroeconomic environment still unsettled, it’s unclear when the VC funding situation will improve. Startups must adapt to the constraints of the current funding climate and explore alternative sources of capital or innovation in their business models to thrive.
Conclusion
In conclusion, while the second week of July 2025 has not been favorable for VC funding in Indian startups, key deals have still taken place. However, the uncertainty in the macroeconomic environment continues to loom large, making it an uphill battle for many startups to secure funding. It remains to be seen when the trend will reverse, and whether Indian startups can overcome the current funding hurdles.
