Only $54.7 Mn Raised This Week; Urban Company Files for IPO, Ather Closes with Tepid Response
The Indian startup ecosystem, often hailed as the world’s third largest, has hit a concerning low this week. With just $54.7 Mn raised across 15 deals between April 28 and May 3, the funding landscape is witnessing a stark slowdown. This marks a 46% dip from the $100.3 Mn secured by 18 startups the previous week and the lowest funding week of 2025, barring the first week of January.
While concerns over financial mismanagement and corporate governance lapses continue to haunt the ecosystem, a few key IPO developments and sector-specific deals tried to keep investor sentiment alive. In this article, we will look into the IPOs,
IPO Season Begins: Urban Company Leads, Ather Limps
There was a glimmer of hope this week as Urban Company became the first startup to file for an IPO in 2025, targeting a ₹1,900 Cr issue. Interestingly, the company trimmed its fresh issue size to ₹429 Cr — a 19% cut from earlier estimates — possibly reflecting caution in the current investor climate.
On the other hand, Ather Energy, the electric two-wheeler manufacturer, closed its IPO with a muted response, getting oversubscribed only 1.43 times. Though Ather is now set to become the first startup to hit the bourses this year, the lukewarm interest raises broader questions around startup valuations and public market readiness.
Fintech Tops Funding Charts, Deeptech Gathers Momentum
Despite the slowdown, fintech emerged as the most funded sector, with two notable deals:
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Metafin raised $10 Mn in a Series A round led by Vertex Ventures Southeast Asia and India.
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Kaleidofin secured $5.3 Mn, led by IDH Farmfit Fund.
Deeptech, a sector that has been under the spotlight following Commerce Minister Piyush Goyal’s remarks last month, clocked $10.5 Mn this week. Key deals included:
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QNu Labs ($7 Mn, led by National Quantum Mission)
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SatLeo Labs ($3.3 Mn, Pre-Series A)
This indicates rising investor confidence in emerging technologies like quantum security and spacetech.
Seed Stage Startups Feel the Chill
Funding at the seed stage dropped sharply by 79% this week. Just six startups raised $3.4 Mn, compared to nine raising $16.1 Mn last week. The dip reflects cautious capital deployment among early-stage investors, possibly influenced by ongoing debates around startup transparency.
Some notable seed-stage deals included:
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Mugafi ($3 Mn, digital content)
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Malaki ($675K, D2C beverages)
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IVANA Jewels ($237K, D2C jewellery)
Most Active Investors of the Week
Despite the overall funding dip, a few investors remained active:
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Inflection Point Ventures backed Vividobots (robotics) and Primebook (affordable laptops).
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Auxano Capital co-invested in Mugafi and Primebook.
Their continued involvement signals a long-term commitment to early-stage innovation, even in lean times.
M&A Activity: Consolidation in Focus
The week also saw some strategic M&A moves:
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The Souled Store acquired Redwolf, furthering its grip on India’s pop culture merchandise market.
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Perfios, a fintech unicorn, made its third acquisition of the year, snapping up IHX, a healthtech platform, to expand its insurance claims business.
Other Major Developments
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PayU, which is preparing for its IPO, raised $120 Mn from parent Prosus via a rights issue.
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Livspace received a $50 Mn capital infusion from its Singapore-based parent as part of its reverse flipping strategy.
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Zepto is reportedly in advanced talks to raise $175.6 Mn in debt from Edelweiss and others.
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Networking platform Medial is seeking to raise $4-5 Mn in its upcoming Series A.
The Road Ahead
While funding numbers have plummeted, IPO activity and M&A movements suggest that India’s startup ecosystem is far from stagnant. With Urban Company and Ather making their way to the public markets, all eyes will be on how these moves affect broader investor confidence. For now, though, the message is clear: governance, transparency, and profitability are no longer optional — they’re survival essentials.
