In a week clouded by corporate misgovernance and investor caution, Indian startups experienced a sharp decline in funding activity. Between April 14 and 19, 2025, startups in the country collectively raised just $65.3 million—a staggering 67% drop from the previous week’s $195.1 million. The steep fall reflects growing investor skepticism amid a series of governance-related controversies in the ecosystem.
Credits: The Economic Times
Funding Recap: Deeptech Defies Odds
Despite the overall funding slump, deeptech emerged as the surprise frontrunner, with startups in the space raking in $22.9 million across four deals. This includes the week’s largest round, raised by drone startup Garuda Aerospace, which secured $11.7 million in Series B funding from Venture Catalysts.
Other notable deeptech deals included:
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Optimized Electrotech ($6M, Series A) in defencetech
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Peppermint Robotics ($4M, Series A) in robotics
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EON Space Labs ($1.2M, pre-Series A) in spacetech
The strong showing from deeptech is particularly significant, considering recent concerns over the sector’s lack of investor traction.
Ecommerce: Always in the Mix
Close on deeptech’s heels was ecommerce, which saw $22.3 million flow into nine startups. D2C brands remained attractive to early-stage investors, with notable rounds including:
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Jewelbox ($3.2M, pre-Series A)
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Nothing Before Coffee ($2.3M, pre-Series A)
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Good Monk ($2M, pre-Series A)
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That Sassy Thing, NOTO, uppercase, and others, which secured seed or pre-Series A funding
The D2C sector’s consistent performance suggests investors continue to bet on consumer-centric brands with strong digital-first identities.
Fintech & Edtech Stay Relevant
Fintech saw some traction this week as Varthana, a lendingtech startup, raised $8.7 million in debt from OfBusiness and Oxyzo. Meanwhile, two major fintech players made headlines with structural changes aimed at future IPOs:
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PhonePe and Razorpay both converted into public entities, signaling serious intent toward public listings within the next two years.
In edtech, CENTA raised $2.3M, while Iyaso attracted $500K for skill development. Imarticus Learning also announced IPO plans to raise ₹750 Cr in the next few months.
Seed Funding Slows Down
Only $2.3 million was raised across five seed-stage deals this week, a dramatic fall from the $10.1 million last week. Investors appeared wary of placing early bets amid regulatory and governance concerns plaguing the broader ecosystem.
However, some notable pre-seed and seed-stage rounds include:
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Cura Care ($586K, home healthcare)
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SportsSkill (undisclosed, hyperlocal services)
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Ochre Spirits (undisclosed, alcoholic beverages)
Investor Highlights: A Few Active Names
Amidst a cautious atmosphere, two names stood out for their activity:
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Venture Catalysts, which led Garuda Aerospace’s round and also backed Optimized Electrotech
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Inflection Point Ventures, which invested in That Sassy Thing and NOTO
These firms maintained their faith in early- and growth-stage opportunities despite the funding dip.
IPO Buzz & Big Moves
IPO chatter dominated headlines this week:
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Sanjeev Kapoor’s Wonderchef is eyeing a ₹1,800 Cr valuation in its public debut.
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CRED is reportedly looking to raise $100–200 million, albeit at a much lower valuation of $4 billion—a 60% markdown.
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MoEngage is gearing up for a big raise of $150–180 million, targeting an $800–850 million valuation.
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Porter is also reportedly in talks for a unicorn-sized round with PE firm Wellington Management.
In M&A news, Clevertap acquired promotion automation startup rehook.ai, expanding its suite of marketing tools.
Credits: ET CFO
Conclusion: A Turbulent Week for the Ecosystem
While the volume of deals held steady at 22 (compared to 20 last week), the overall funding value nosedived—signaling a shift in investor behavior driven by caution rather than scarcity. With governance concerns hanging over the sector like a dark cloud, startups may need to refocus on transparency, profitability, and long-term value to regain investor trust.
Still, the week offered silver linings: deeptech’s resilience, IPO readiness from fintech majors, and active participation from seasoned investors suggest that the Indian startup story is far from over—it’s just facing a reality check.
