In April 2025, Venture capital funding for Indian startups declined by 16% compared to March, totaling $1.1 billion across 115 deals. Despite the decrease in funding value, the number of deals increased from 86 in March, indicating sustained interest in early-stage investments.

The reduction in funding is attributed to the absence of large-scale investments. April saw only one deal exceeding $50 million, with Parsons Nutritionals securing $80 million. Additionally, Northern Arc raised $80 million through a combination of equity and debt. This trend highlights the challenges startups face in attracting substantial equity investments, leading many to explore debt financing options.

Startups in the initial stage dominated the funding landscape, accounting for 250 of the 312 deals in the first quarter of 2025. However, the total funding value for this category remained modest at $805 million. Growth-stage startups attracted the highest funding amount at $852 million across 26 deals, while late-stage funding was minimal. This pattern underscores the cautious approach investors are taking toward larger investments amid global economic uncertainties.

Fintech emerged as the leading sector, attracting $222 million in funding during April. Other sectors such as manufacturing, SaaS, and cleantech also garnered investor interest. Notably, cleantech is gaining traction, reflecting a shift toward sustainable and environmentally friendly technologies. Geographically, Delhi-NCR led in funding, followed by Bengaluru and Mumbai. This marks a shift from the usual trend where Bengaluru typically tops the list, suggesting a more distributed investment pattern across major Indian cities.

The decline in VC funding reflects broader macroeconomic challenges, including global trade tensions and a cautious investment climate. Despite these hurdles, the increase in deal volume indicates that investors remain interested in the Indian startup ecosystem, particularly in early-stage ventures. Industry experts anticipate that funding activity may rebound in the latter half of the year as economic conditions stabilize and investor confidence returns.