India Deals Barometer Report: Growth investments lift overall startup funding in Aug

Private equity and venture capital investments in Indian startups rebounded to over $1 billion in August, crossing the psycholoicaly-important milestone after slipping below the level in July. The rebound was largely on account of a 3.5x surge in growth-stage investments in the month, which offset a decline in early-stage activity, underscoring investors’ continued caution.

Startups in India raised $1.1 billion in August, up nearly 31% from $840 million in July, show proprietary data compiled by DealStreetAsia.

Despite the uptick in funding value, the number of deals declined to 92 from 100 in the previous month, reflecting ongoing caution among investors.

On a year-on-year basis, deal value dropped sharply by 38% from $1.76 billion across 108 deals in August 2024. The data suggest that while capital flow is improving, investor sentiment remains muted amid global economic uncertainty, tighter liquidity, and increased scrutiny of startups.

Startup fundraising in India

Looking at the year so far, startup fundraising between January and August has been volatile. Funding started strong in January at over $1.8 billion but plunged nearly 48% to $943 million in February. March saw a partial recovery with $1.4 billion raised, hinting at a brief resurgence in investor confidence. However, the momentum proved short-lived as funding dipped again to $899 million in April. While May and June saw modest gains, the downtrend resumed in July.

August saw the closure of two megadeals—defined as transactions worth $100 million or more—compared to just one in July.

The largest deal of the month came from housing finance platform Weaver Services, which raised $170 million in a round led by Lightspeed and Premji Invest, with participation from Gaja Capital. The second major transaction involved Vistaar Financial Services, a micro-enterprise lender backed by Warburg Pincus, which secured nearly $156 million in a private equity round led by Motilal Oswal Alternates, the alternative investment arm of the Motilal Oswal Group.

Financial services drives funding in August

Financial services emerged as the top-funded industry in August, raising a total of $464.3 million across 14 deals—up significantly from $96.9 million across eight deals in July. The jump in funding to the industry was led by Weaver Services’ and Vistaar Financial Services’ megadeals mentioned earlier.

Other notable fundraises within the industry were sealed by consumer lending startup Fibe ($25.5 million), banking infrastructure startup TransBnk ($25 million), virtual credit card platform Kiwi ($24 million), affordable housing finance company Altum Credo ($19.5 million), Shivalik Small Finance Bank ($12 million), and digital lending platform Zype ($10.2 million).

Retail was the second-highest funded industry in August, raising $148.5 million across 16 deals—up sharply from $30.1 million across 10 deals in July.

The standout transaction was The Sleep Company, which raised $54.5 million in its Series D funding round led by homegrown private equity firm ChrysCapital, with participation from wealth and asset management company 360 ONE Asset. Other deals within retail were RENÉE Cosmetics ($30 million), R for Rabbit ($27 million), Aukera ($15 million), Palmonas ($6.2 million), Solitario Lab Grown Diamonds ($3.6 million), Outzidr ($3.1 million), Fairdeal. Market ($3 million), and Firefly Diamonds ($3 million).

Software, which was the most funded industry in July, slipped to rank three in August, with $85.4 million raised from 10 deals, down from $189.1 million across 24 deals in July. Leading the industry was Hyderabad-based software-as-a-service firm Darwinbox, which raised $40 million from the Canadian pension fund Ontario Teachers’ Pension Plan (OTPP). The transaction valued Darwinbox at about $1 billion—a valuation it has maintained since entering the unicorn club in January 2022.

Other notable deals within software were SuperGaming ($15 million), Graas AI ($9 million), WizCommerce ($8 million), TurboHire ($6 million), Matiks ($3.1 million), and CodeKarma ($2.5 million).

Together, the top three sectors—financial services, retail, and software—accounted for approximately $698 million, or 63% of total startup funding in August.

Growth-stage funding soars

Growth-stage investments—which include Series B and later rounds, private equity, and pre-IPO deals—totalled $510 million across 14 transactions in August, up significantly from $143.2 million across six deals in July. These investments accounted for 46.3% of total deal value in August, compared to just 17% in July.

Notable growth-stage deals in the month were sealed by Vistaar Financial Services ($156-million private equity round), The Sleep Company ($54.5-million Series D), Darwinbox ($40-million Series D), Truemeds ($85-million Series C), RENÉE Cosmetics ($30-million Series C), R for Rabbit ($27-million Series B), TransBnk ($25-million Series B), Kiwi ($24-million Series B), SuperGaming ($15-million Series B), and Aukera ($15-million Series B).

In contrast, early-stage funding—which covers pre-seed to Series A rounds—saw a decline in both value and volume. These deals made up just 16% of total investments in August, down from 28.5% in July. A total of 55 early-stage deals worth $178.3 million were recorded during the month, compared to 66 deals amounting to $240.8 million in July.

The largest seed round in August was raised by Peeko, a Bengaluru-based quick commerce startup specialising in baby care products, which raised $3.2 million in a funding round led by Stellaris Venture Partners. Other seed rounds in the month included Firefly Diamonds ($3 million), Olee Space ($3 million), Harajuku Tokyo Café ($2 million), Trackk ($1 million), Shortgun ($1 million), PeelON ($1 million), among others.

In the largest Series A round, Arintra, a GenAI-powered medical coding platform for healthcare providers, raised $21 million funding led by Peak XV Partners, with participation from Endeavor Health Ventures, Y Combinator, and others.

The only pre-IPO deal was clinched by Solitario Lab Grown Diamonds. There were four debt deals worth $$81.5 million in August as against five deals worth $57.6 million in July.

Top investors

Venture capital firm Peak XV Partners emerged as the top investor in August with a total of five deals including telehealth platform Truemeds, genAI-native autonomous medical coding platform Arintra, lab-grown diamond jewellery brand Aukera, AI-driven entertainment startup Dashverse, and B2B commerce platform for wholesale distributors WizCommerce.

Blume Ventures, Fireside Ventures, Inflection Point Ventures, and Stellaris Venture Partners occupied the second place with four investments each. Blume Ventures invested in startups including Anmasa, WizCommerce, DPDzero, and Vutto.

Accel, Indian Angel Network (IAN), Sorin Investments, and Vertex Ventures made three investments each.