Private equity and venture capital investments into Indian startups rose 18.5% to $3.65 billion in Q4 2025 from $3.08 billion in Q3, signalling a modest revival in investor sentiment, according to DealStreetAsia DATA VANTAGE‘s latest report India Deal Review: Q4 2025.
Deal activity, however, eased to 287 transactions, down 4.3% sequentially, reflecting investor preference for fewer, larger bets.
On a year-on-year basis, the funding environment remained subdued, with capital inflow declining 12.3% from $4.16 billion in Q4 2024, while deal volume was also down 4.7%.
Fundraising by Indian startups QoQ
Source: DATA VANTAGE
Large-ticket investments played a key role in the quarterly recovery. A total of seven megadeals—funding rounds valued at $100 million or more—were sealed in the October-December quarter, cumulatively raising $1.35 billion, a sharp increase from $839 million across five megadeals in Q3 2025. Megadeals accounted for nearly 37% of the total deal value in Q4, up from 27% in Q3.
Top industries by deal value in Q4 2025
Software pipped financial services to emerge as the most funded industry in Q4 2025, collectively raising $796.4 million from 57 deals, compared to $376.4 million across 53 deals in Q3. Uniphore led the sector with a $260-million Series F round backed by investors such as NVIDIA, AMD, Snowflake, and Databricks.
Other key deals in software included MoEngage ($180 million & $100 million), UnifyApps ($50 million), AgroStar ($30 million), and Mem0 ($24 million).
Financial services ranked second in Q4, raising $782.8 million across 40 deals, compared with $722.7 million from 33 deals in the previous quarter. Logistics and distribution secured third spot with a kitty of $554.6 million across six deals, driven primarily by Zepto’s $450-million raise.
Collectively, the top three sectors—software, financial services, and logistics/distribution—raised $2.13 billion in Q4, accounting for 58.5% of the total deal value during the quarter.
Growth funding jumps 47% in Q4
Growth-stage funding surged in December, with Series B and later-stage rounds—including private equity and pre-IPO deals—raising a total of $1.66 billion across 41 transactions. The segment accounted for 45.5% of the quarter’s total deal value and increased nearly 47% over the $1.13-billion funding raised in Q3. In comparison, their share stood at 36.5% in the third quarter.
Funding for pre-seed and seed-stage startups stood at $167.8 million in Q4, falling 14% from $195.4 million in Q3. Startup funding in pre-Series A and Series A stages also dropped to $456.8 million across 67 deals in the fourth quarter, compared with $507.1 million from 88 transactions in Q3.
Bengaluru once again made it to the top with total funding worth $1.54 billion across 113 deals in Q4. In the previous quarter, startups based out of the city together raised $900 million across 108 deals. Bengaluru alone accounted for about 42% of the total funding raised by Indian startups, including Zepto, MoEngage, Kapiva, Finnable, Digantara Industries, Ripplr, Ultraviolette, Snabbit, and CoreEL Technologies.
Mumbai slipped to second place after collectively garnering $769.3 billion across 37 deals as against $1.17 billion across 43 transactions in Q3. Meanwhile, Chennai, which did not feature in the top 10 in Q3, made it to the third position in Q4.
Together the top three cities raised $2.7 billion, or 74% of the total funding value, in Q4.
Startup fundraising in 2025
Total proceeds from private equity and venture capital investors stood at $14.24 billion in 2025, registering a drop of 12.5% from $16.27 billion in 2024. The share of megadeals in overall startup funding fell to nearly 32% in 2025 from about 41% in the previous year, reflecting a reduced reliance on large-ticket transactions.
“Investors are backing companies with demonstrated execution and a good operating track record. While early-stage funding will continue—there is greater emphasis on promoter quality, capital efficiency, and early validation of product–market fit. Startups will need to demonstrate traction earlier in their journey before accessing institutional capital. Overall, this shift, we believe, will result in a higher-quality pipeline of companies moving through the ecosystem,” said Pratip Mazumdar, co-founder & Partner, Inflexor Ventures.
The India Deal Review: Q4 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
