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

In July, venture capital (VC) funding for startups in India saw a 29% year-over-year increase, reaching a total of $804 million from 98 deals. However, this figure marked a 61% decline compared to the previous month's $2,076 million raised in June. Despite the overall decrease, July's funding was notable considering the current geopolitical climate.

The boost came from two significant deals: Emergent securing $130 million and Udaan raising $160 million. Most other deals did not exceed $50 million, indicating ongoing challenges in raising substantial capital for Indian startups.

The slowdown in funding was primarily attributed to the scarcity of AI startups, a sector that typically garners investor interest worldwide. July witnessed 98 deals, two fewer than June. Nevertheless, the difference in total funding was substantial. To date, the first seven months of VC funding into Indian startups have resulted in a collective capital raise of approximately $7.7 billion, with a possible closure of the year slightly exceeding the $12.1 billion raised in 2025.

In terms of funding stages, early-stage funding demonstrated the most robust performance, both in terms of the number of deals and the amount raised. This trend has persisted for the past three years, with early-stage funding categories consistently showing the strongest traction in terms of deal flow and raised funds. Late-stage funding, traditionally associated with larger deals, has remained relatively dormant.

The marketplace sector emerged as the most funded, followed by fintech and aerospace. Bengaluru led the funding activity in July, closely followed by Delhi-NCR and Mumbai, a trend that has remained consistent over time. Other cities, such as Chennai, Hyderabad, and Pune, have yet to match the dominance of these three cities in terms of venture capital funding.