Fundraising by Indian startups slowed down further in Q3 2025, marking the lowest levels seen in over a year and a half. Private equity and venture capital investments into Indian startups touched a new six-quarter low of $3 billion in Q3 2025, down 9.9% from $3.33 billion in Q2 2025, according to data from DealStreetAsia DATA VANTAGE‘s latest report India Deal Review: Q3 2025.
Deal volume was nearly flat at 300, compared with 299 in the previous quarter, the data showed. On a year-on-year basis, funding declined 30.2% from $4.3 billion in Q3 2024, while deal volume dropped 13% from 343 deals in Q3 2024.
While funding levels remain higher than in 2023, the gradual decline through the year points to investors becoming more selective and focused on sustainable growth over aggressive expansion.
Financial services, software, and pharmaceuticals emerged as the top three funded sectors in Q3 2025, collectively raising $1.4 billion across 91 deals.
There were five megadeals—each valued at $100 million or more—in the quarter, totalling $839 million, compared with seven such deals worth $1 billion in Q2 2025. Their contribution to the overall funding pie also dipped, falling to 27% in Q3 from 30% in the previous quarter, indicating a pullback in large-scale bets by investors.
Financial services tops the charts
Financial services, software, and pharmaceuticals were the most funded industries in Q3 2025, securing nearly $1.4 billion, or 45.6% of the quarter’s funding value. Led by the Weaver Services deal, financial services startups scooped up $722.7 million across 33 transactions. In Q2, startups in the industry secured a total of $748.6 million from 45 transactions.
Software moved up to the second place with total funding worth $376.4 million across 53 deals. Led by the Pharmeasy deal, pharmaceuticals made it to the third place with $305.4 million in funding from five deals.
Broken down by verticals, e-commerce retained the top spot among most funded verticals in Q3 2025, securing a total of $885.2 million across 87 deals—up from $873.2 million raised through 81 deals in Q2. Pharmeasy led the pack with $193 million in funding. Fintech lending came in second, raising $462.1 million from 12 deals—more than double of $202.1 million from 11 deals in the previous quarter. Meanwhile, AI and Machine Learning secured the third spot, attracting $266.1 million across 23 deals.
Growth-stage continues to dominate
Growth-stage investments—classified as Series B or later rounds (including private equity and pre-IPO rounds)—collectively raised $1.13 billion from 30 deals in Q3, down from $1.97 billion from 28 deals in Q2.
Pre-seed and seed startups secured $195.4 million across 106 deals, marginally lower than $196.3 million across 100 deals in Q2. Pre-Series A and Series A funding stood at $507.1 million from 88 deals in Q3, down from $580.8 million from 79 deals in Q2.
Mumbai emerged as the most funded city in Q3, overtaking both Bengaluru and Gurugram. The city attracted $1.17 billion across 43 deals—a sharp rise from the $442.1 million raised through 46 deals in Q2. Bengaluru, which held the top spot in Q2, slipped to second place with $900.8 million in funding in Q3—a decline from $1.47 billion in the previous quarter.
Venture capital firm Peak XV Partners and investing platform Indian Angel Network (IAN) emerged as the top investors in Q3 with a total of 12 investments each. Inflection Point Ventures ranked second with 11 investments, while Blume Ventures and Accel made 10 and nine investments, respectively.
The India Deal Review: Q3 2025 report offers data and insights on:
- Quarterly fundraising trends
- Top industries and verticals
- Top funding destinations
- Megadeal value and volume
- List of most active investors
