August 3, 2025: India’s startup funding has seen a sharp decline in early August 2025, with venture capital activity continuing to slow down. From July 28 to August 2, Indian startups secured about $130 million across 21 deals, marking a steep fall of roughly 36% compared to the previous week’s $202 million.
This is part of a broader trend, as July 2025 turned out to be the slowest month for startup funding so far this year, with total inflows of $621 million—down over 40% month-on-month and year-on-year.
Growth-stage investments largely dried up, and most of the capital flowed into early-stage startups. The largest deal involved Safe Security, a cybersecurity firm, which raised $70 million in Series C funding. Other notable recipients include AI and enterprise tech startups, Metaforms closed $9 million in Series A, Sharpsell.ai raised about $3.4 million, and Bhindi.ai (agentic AI platform) secured $4 million. Sectors such as AI, cybersecurity, and SaaS remained active despite the capital crunch, while mega or late-stage startup funding deals were rare.
Tech Startup Funding Falls, Investor Sentiment Turns Selective
City-wise, Bengaluru led with the most deals, followed by Delhi-NCR and Mumbai, while AI, SaaS, and e-commerce were the dominant segments. There were also key leadership changes and select new hirings across the ecosystem.
Investor sentiment is now marked by caution, with VCs showing a preference for early bets and highly scalable businesses in AI, B2B, and enterprise tech. Factors like rising global rates, uncertain macro conditions, and domestic regulatory changes are making investors more selective.
Large “unicorn” or mega funding rounds remain absent, and analysts predict this subdued trend may persist unless there is a major exit or market resurgence. For now, capital efficiency and sustainable growth are top priorities for founders as the ecosystem adjusts to leaner funding cycles.
