India’s startup ecosystem faces a challenging year as venture capital funding hits a potential five-year low. According to a recent CB Insights report, 2025 has seen 653 deals amounting to $5.7 billion in total funding. This marks a 21% drop from last year’s figures.
In 2024, there was a total funding of $11.1 billion. If this downward trend continues, the venture capital performance may barely reach or miss the previous year’s numbers. This signals an impending funding winter.
The COVID-19 pandemic in 2021 disrupted traditional sectors like airlines, automobiles, and hospitality. But it created an unprecedented opportunity for tech startups. With over 2100 deals that year, the sector raised a record $30 billion.
There were major investments in companies such as Flipkart ($3.6 billion), Mohalla Tech’s ShareChat ($502 million), Zomato ($500 million), and Byju’s ($460 million). However, the subsequent years have seen a decline. While 2022 witnessed a minor dip, 2023 experienced a significant drop.
Deal numbers halved and cumulative funding was slashed by two-thirds. In 2025, the largest deal was $275 million raised by Essar’s GreenLine Mobility Solutions. This was followed by $200 million for IPO-bound Groww and $120 million by Jumbotail, a B2B e-commerce company.
The tech sector, particularly e-commerce and fintech, continues to dominate funding.
Vc funding trends in india
Notably, Infosys reported a 9% jump in net profit to ₹6,921 crore for Q1.
This reflects the sector’s relative stability. Globally, venture capital trends present a different scenario. In Q2 of 2025, global funding reached $94.6 billion.
This was the second-highest total since Q2 of 2022. However, deal volume fell 9% from the previous quarter. This contraction highlights a cautious approach among investors.
Hard tech companies secured significant funding in Q2. Entities like World View ($2.6 billion), Anduril ($2.5 billion), and Montera Infrastructure ($1.5 billion) led the charge. AI and AI-related tech continue to attract substantial investments.
Giants like Meta have invested $14.3 billion in AI development companies. Elon Musk’s xAI raised $5 billion. Despite global trends, India appears to be missing out on these mega moves.
The country’s venture capital remains concentrated in familiar sectors like fintech and e-commerce. There are no emerging sectors on the horizon. Without a significant turnaround in the latter half of the year, India could indeed experience a protracted venture capital winter.