Venture capital funding for Indian startups decreased by 11% in the first half of 2025, totaling US$5.7 billion compared to US$6.4 billion during the same period last year, according to YourStory Research.

The decline is attributed to a reduction in high-value deals and an uncertain macroeconomic environment.

The number of deals in H1 2025 remained stable at 621, down from 655 in H1 2024.

However, funding dropped more compared to the second half of 2024, which recorded US$7.2 billion in investments, marking a 21% decline.

Large deals valued at US$100 million or more were limited, with only eight startups receiving such funding in this period. These startups include Infra.market, Darwinbox, Leapfinance, Zolve, PB Healthcare, Porter, Udaan, and Jumbotail.

Geopolitical uncertainties, including tensions in the Middle East and US trade policies, have contributed to investor caution. The rise of AI has also introduced new uncertainties, leaving investors unsure about its potential impact on startups.

This decline in VC funding highlights ongoing challenges for the Indian startup ecosystem. If the trend continues, total funding for 2025 may fall short of last year’s figures.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ India’s VC slowdown follows a broader regional pattern amid heightened global caution

The 11% decline in India’s first-half funding reflects a regional pattern rather than an India-specific issue.

India’s VC investments dipped to $2.4 billion in Q1 2025, while the broader Asia Pacific region hit a 10-year low in venture funding during the same period1.

This follows a much steeper decline in 2023, when Indian VC funding fell dramatically from $25.7 billion to $9.6 billion, demonstrating that the current slowdown is part of a longer adjustment cycle2.

The number of deals remaining relatively stable (621 in H1 2025 vs. 655 in H1 2024) while funding amounts decrease suggests investors are maintaining activity but with more conservative check sizes.

Geopolitical uncertainty has emerged as the top concern among venture capitalists globally, with tensions in the Middle East and changing trade policies specifically impacting investment strategies3.

Despite these headwinds, India’s long-term investment appeal remains strong due to robust macroeconomic fundamentals, with GDP growth projected around 7% for the fiscal year4.