Indian startup funding took a downturn in the third quarter of 2025, with total funding declining 38% YoY to $2.1 Bn. As per Inc42’s “Indian Tech Startup Funding Report, Q3 2025”, total deals also declined to 240 deals from 262 deals between July 1 and September 28, 2025.

However, there seems to be a silver lining emerging amid this lull. As per the report, unique investor participation in backing Indian startups rose 7% YoY and 4% QoQ to 676 in the quarter. Besides, the average deal size also edged up slightly to $3 Mn from $2.9 Mn a year earlier.

Further, the dip in funds allocated in Q3 2025, which was seen across startup sectors, came at a time when we saw more venture capital (VC) firms launch new funding vehicles or raise fresh capital in their pre-existing funds.

Here are a few key updates on fund related developments that happened in the quarter:

• Deeptech focussed VC firm Speciale Invest closed its third fund raising INR 600 Cr. The fund was oversubscribed 20% from the initially planned INR 500 Cr.
• Rajesh Mane and Ankit Jain launched their new VC firm Spotlight Strategic Partners with a maiden early-stage focused fund with a corpus of INR 200 Cr.
• Early stage investor Kettleborough VC launched its second fund with a target corpus of INR 80 Cr and marked the first close of the fund at INR 35 Cr.
• Atomic Capital announced the final close of its maiden fund at INR 400 Cr.

With funds worth $2.5 Bn launched in the quarter, investors have launched funds worth over $9 Bn in the first nine months of 2025, surpassing the $8.7 Bn number of 2024.

With VCs accruing more dry powder in the quarter, more than half of startup investors believe that the upcoming calendar year would see startup funding pick up in India, As per Inc42’s investor pulse survey, about 51% of over 80 surveyed investors expect more opportunities in the coming year, though 27% remain wary amid global uncertainties and US-India trade frictions.

As for Q3, the investment landscape continued to be dominated by the usual suspects. While venture debt firm Stride Ventures continued to tower over the roster of investors in terms of the total cheques signed, new investments of VC firms like Peak XV, Accel, Blume VC, among others frequently made headlines.

With that, here’s an update on what the quarter looked like for top Indian startup investors.

© Inc42