Indian entrepreneurs continue to experience difficulties in obtaining venture capital (VC) funding; in the first nine months of 2025, cash inflows decreased by 18% when compared to the same period in 2024.

In the first nine months of 2025, 926 deals totalling $8.6 billion were funded.  In comparison, YourStory Research’s data research shows that companies raised a total of $10.6 billion in funding over the nine months of 2024.

With three months left in the year, it appears doubtful that the total amount of venture capital funding raised by Indian entrepreneurs in 2025 will surpass that of 2024 based on current patterns.  The entire amount of venture capital funding for Indian businesses in 2024 was $13.6 billion.  Reaching at least 2024 levels will be the optimum result.

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Not even the quarterly trends are encouraging.  Compared to the same period in 2024, the total amount of funds raised during the third quarter of 2025—that is, the months of July, August, and September—was $2.8 billion, a 32% decrease.  This was also a 12.5% decrease from the second quarter of 2025 on a sequential basis.

Overall, this does not bode well for the Indian startup scene because capital flow has been impeded by the unstable macroeconomic climate.  Additionally, a major portion of funding is currently going to AI firms, particularly in the US.  But in India, where there aren’t many AI firms, this tendency hasn’t held true.

The late stage category raised the most money in the third quarter of 2025, followed by the early stage and growth categories.  The slow infusion of funds into the growth and late-stage segments has been the largest obstacle facing the Indian startup ecosystem.

Fintech remained at the top of the list of industries that raised capital in the third quarter of 2025, followed by D2C and healthtech.  Fintech has continuously been the stable and evergreen industry that draws interest from venture capitalists.

India presents a distinct picture in light of the current trend in developed economies, where AI companies receive the largest percentage of financing.  Only $100 million was raised by the AI segment in the third quarter of 2025.

In the third quarter of 2025, Mumbai was the most popular destination for funding, followed by Bengaluru and Delhi-NCR.  These patterns suggest that venture capital funding has not yet significantly expanded to additional centers like Chennai, Hyderabad, and Pune.

All things considered, the patterns do not bode well for the Indian startup scene.  Entrepreneurs, however, are resilient enough to withstand these difficulties.  The growing number of businesses making their way to the public markets through initial public offerings (IPOs) has been the one bright light.  I hope 2026 turns out to be a better year.