India Deals Barometer Report: Fundraising hits a snag in Feb as big cheques dry up

After recovering from a prolonged funding winter and soaring in the second half of 2024, startup fundraising hit a snag again in February this year.

Total proceeds from private equity and venture capital investors stood at $943 million last month from 108 venture transactions. Compared to January, the funding value was down 48.4%, while the deal volume fell nearly 13.6%, according to proprietary data collated by DealStreetAsia.

This is also the first time fundraising for startups has fallen below the $1-billion mark in seven months. That said, 2025 had a good start with startups collectively raking in $1.83 billion from 125 transactions in January.

There were nine transactions in February that did not disclose the funding size, the data showed.

Startup fundraising in India month-on-month

On a year-on-year basis, the funding value grew by a mere 9.8% from $859 million in February 2024. The deal volume inched up from 105 in the comparable period last year.

While startup fundraising in India was muted for most of 2023 due to a prolonged funding winter and market uncertainties, it showed signs of recovery in 2024. Indian startups raised $16.3 billion from 1,267 deals in 2024, marking an increase of 38% in value and 35% in volume over the previous year.

Unlike January, which saw four homegrown startups securing deals worth over $100 million each, there were no transactions that touched or exceeded that amount in February.

The largest round of $80.5 million was raised by Lightstorm, from NIIF Infrastructure Finance Limited (NIIF IFL). Lightstorm, which provides cloud and data centre networking solutions, will use the funds to expand its network infrastructure and operational capabilities, it said.

Top 10 funding deals in Feb 2025

Digital payments startup ToneTag came second with $78 million funding led by ValueQuest S.C.A.L.E. Fund with participation from Iron Pillar, Elevate Inflection Capital, and Elevate Innovation Partners, in a mix of primary and secondary capital. The firm plans to use the funds to expand to new markets including Asia, South America and the Middle East.

Another big deal closed during the month was by B2B marketplace Udaan, which raised $75 million as part of its Series G funding round led by London-based global investment manager M&G Plc. The round also saw participation from Lightspeed Venture Partners.

Software startups retain top spot

Broken by industry, software startups made it to the top once again with funding proceeds totalling $221 million from 21 deals. SpotDraft, an AI-driven contract lifecycle management (CLM) platform built for in-house legal teams in India, led the pack with $54 million in its Series B round of funding led by Vertex Growth Singapore and Trident Partners. Existing investors Xeed VC, Arkam Ventures, Prosus Ventures, and Premji Invest also participated.

Banking technology startup Zeta followed with $50 million investment from a strategic investor at a valuation of $2 billion. While the investor’s name was not disclosed, according to a report in The Economic Times, the Bengaluru-based company secured the funding from US-based healthcare and financial services firm Optum.

Other prominent deals within software were multi-cloud storage management platform Lucidity that raised $21 million in a Series A funding round led by WestBridge Capital, AI deployment and scaling platform TrueFoundry ($19 million), AI decision science company Bridgetown Research ($19 million), automotive-focused visual technology startup Spyne ($16 million), and enterprise AI startup Cognida AI ($15 million).

Financial services occupied the second place with total funding proceeds worth $194.7 million from 19 deals. ToneTag led the pack with $78 million funding followed by payments solutions provider Cashfree, which raised $53 million in a funding round led by Korean digital entertainment company Krafton and existing investor Apis Growth Fund II, a private equity fund managed by Apis Partners Group (UK).

Other deals within the industry were Waterfield Advisors ($18 million), Oxyzo ($12 million), Auxilo ($5.7 million), and Credit Fair (5 million).

With $160.5 million in funding from nine deals, retail startups came in third. Udaan led with $75 million funding while Geniemode, an apparel sourcing and supply chain platform, raised over $50 million in a Series C round. The funding round was led by Multiples Alternate Asset Management, with participation from Fundamentum, Paramark Ventures, and existing investor Info Edge Ventures.

In February, the top three industries—software, financial services, and retail—collectively raised $576.4 million, or roughly 61% of the entire value.

Lack of big-ticket transactions hit growth-stage deals

Growth-stage funding—or investments at the Series B stage and later (including private equity and pre-IPO)—dropped to $485.9 million in the month from $1.3 billion in January. The share of growth-stage deals in total funding, too, dropped to 50% in February from 72% in January. Udaan, ToneTag, Shawdowfax, Rapido, Zeta, Cashfree, Geniemode, The Whole Truth were among the startups that raised growth rounds in the month.

The value of pre-seed and seed stage deals dropped 26.7% to $51.6 million across 37 transactions in February from $70.3 million across 42 transactions in January. Singulr AI, an enterprise AI governance and security platform, raised the largest seed round of $10 million led by Nexus Venture Partners and Dell Technologies Capital, with participation from leading industry executives.

Other seed deals in the month were closed by Nivaan Care ($4.25 million), OneTab AI ($3.3 million), Toonsutra ($3.2 million), Mysa ($2.8 million), HiWiPay, ($2 million), ArthAlph ($2 million), and ANSCER Robotics ($2 million).

The value of pre-Series A and Series A stage deals, however, remained almost flat at $139.8 million. Their number was, however, down to 20 in the month from 28 in January.

Marking the largest Series A round, global cloud storage management platform Lucidity secured $21 led by WestBridge Capital. Existing investor Alpha Wave also participated in the round. Other Series A transactions in the month included TrueFoundry ($19 million), Bridgetown Research ($19 million), Spyne ($16 million), and Cognida AI ($15 million).

The value of debt deals also dropped substantially to $23.9 million across four deals, as against $150.8 million from seven deals in January.

Top investors

Venture capital and growth investing firm Peak XV Partners (formerly Sequoia Capital India & SEA) emerged as the top investor in February investing in four deals, including TrueFoundry ($19 million), Nirmata ($9.6 million), The Whole Truth ($15 million), and Eduvanz Financing ($3 million).

Venture Catalysts, along with its accelerator platform 100Unicorns (erstwhile 9Unicorns), AngelList, Blume Ventures, and Nexus Venture Partners came second with a total of three investments each in February.

Other active investors in the month were Accel, ah! Ventures, Alkemi Growth Capital, Antler, Eximius Ventures, Inflection Point Ventures, Info Edge Ventures, and LetsVenture among others.