VC funding in July rises 29% YoY but declines sharply from June

Venture capital (VC) funding in India's startup ecosystem declined in July, an expected trend after the surprising mega fundraise by Cred in June.

July saw a total funding of $804 million from 98 deals, which was a 61% decline when compared to June where the amount raised was $2,076 million. However, when compared to July, 2025 where the fund raise stood at $621 million there was a 29.4% increase in funding, per YourStory research.

Despite the slowdown, the total funds raised in July were significant considering the current geopolitical environment. The boost to funding actually came from two key deals: Emergent raising $130 million and Udaan securing $160 million.

Outside of these two transactions, no deals crossed the $50 million mark. This actually reveals the challenges continued to be faced by the Indian startup ecosystem in terms of raising large amounts of capital.

The slowdown in funding is attributed to a lack of AI startups, a segment that is attracting investor interest globally.

July saw 98 deals, just two short of the number in June. However, the difference in the total amount was significant.

Overall, the first seven months of VC funding into Indian startups has seen a capital raise of around $7.7 billion and most likely the year may close marginally higher than the $12.1 billion that was raised in 2025.

On stage-wise funding, the early stage showed the strongest traction both in terms of number of deals as well as amount raised. This was followed by growth and then the late stage of funding.

This has been the trend for the last three years where the early stage funding category continues to show strongest traction in terms of deals flow and as well as fund raise. The late stage funding category where generally the large deals are raised, the activity has remained quite muted.

Even in the categories of funding, the marketplace segment was the highest funded followed by fintech and aerospace.

In terms of cities that got funded in July . Bengaluru was at the pole position followed by Delhi-NCR and Mumbai. This has been a dominant trend for quite some time now as other cities like Chennai, Hyderabad or Pune are yet to match the dominance of these three cities.