Indian startup funding drops to $662 Mn in July after June spike

Indian startups raised $662 million in July, a sharp decline from the blockbuster $2 billion recorded in June, when Meta’s investment in CRED accounted for a significant share of the month’s funding. July saw only one funding round above $100 million as Emergent raised fresh capital and became the seventh unicorn of 2026. The second largest deal stood at just $40 million, a sign of the limited availability of large ticket funding during the month. Despite the month on month decline, July’s funding remained above May’s $630 million. Early stage startups accounted for 38% of the total capital raised. IPO activity remained strong, although Zepto postponed its public listing amid valuation discussions with investors. The month also saw four startup shutdowns, while no major layoffs were reported separately in the media, a rare occurrence in recent months.

[Funding overview]

According to data compiled by Entrackr, Indian startups raised approximately $662 million across 85 deals in July. The total included 16 growth and late stage deals worth $410 million and 64 early stage deals worth $252 million. Additionally, five deals were disclosed without their funding amounts during the month.

[M-o-M and Y-o-Y trend]

Month on month, startup funding fell 67% to $662.2 million in July from $2 billion in June, the second lowest monthly total in the past 13 months. Year on year, funding rose 11% from $597.6 million in July 2025 to $662.2 million in July 2026, while the number of deals declined from 105 to 85.

[Top 10 growth stage deals]

Growth and late stage funding in July was led by AI startup Emergent, which raised $130 million in a Series C round. Raghu Vamsi Aerospace Group, Veriqus, and BusinessNext followed with $40 million each, while Neo Group secured $36.3 million in a Series C round. Other notable deals included Limelight Diamonds, Elevate Education, Quick Clean, Apna Mart, and Naturis Cosmetics, with investments spread across AI, fintech, deeptech, consumer, edtech, and manufacturing.

[Top 10 early stage deals]

Early stage funding in July was led by Arboreal Bioinnovations, which raised $24 million in a Series A round. Plazza and Vorflux followed with $15 million each, while Reo.Dev and BatX Energies secured $11.3 million and $11 million, respectively. Other notable deals included Dovetail Capital, Aham Housing Finance, E3 Electric.AI, CARPL.ai, and Aukera, with investments spread across foodtech, AI, fintech, mobility, healthtech, battery technology, and ecommerce.

[Mergers and Acquisitions]

M&A activity in July featured several notable transactions across ecommerce, proptech, edtech, and venture capital. Snitch acquired fashion brand Berrylush to expand its presence in women’s fashion, while Aurum PropTech announced plans to acquire Housing.com in a $46.2 million deal. PhysicsWallah increased its stake in Sarrthi IAS to a majority through a $7.5 million transaction, which strengthened its presence in the civil services test preparation segment. WTF also acquired creative agency BTG, which expanded its presence in the brand and creative services space.

[City and segment wise deals]

Bengaluru retained its lead in startup funding during July, accounting for $323.93 million, or 48.92% of the total capital raised across 43 deals. Delhi NCR followed with $136.35 million from 16 deals, while Mumbai secured $100.15 million across 13 deals. Hyderabad raised $49.6 million through three deals, whereas Pune recorded $11.6 million from four transactions.

AI attracted the highest investor interest in July with 15 deals worth $201.62 million, accounting for 31.75% of the total funding raised. Fintech followed with $141.5 million across 8 deals, while ecommerce startups secured $55.15 million through 12 deals. Deeptech and edtech startups raised $43.35 million and $20.25 million, respectively.

[Stage wise deals]

Series B attracted the highest funding in July with $190.4 million across 8 deals, accounting for 28.75% of the total capital raised. Series A followed with $141.16 million from 17 deals, while Seed rounds contributed $60.97 million across 29 deals. Pre Series A and Pre Seed startups raised $30.25 million and $11.45 million, respectively.

[Layoffs, shutdowns and departures]

July saw four startup shutdowns, with Dream Money, Klydo, PicSee, and Medial ceasing operations. Unlike previous months, there were no major layoff announcements. Even so, layoffs during H1 2026 affected nearly 2,500 employees across private startups. On the leadership front, startups recorded 25 key executive hires and 6 senior level departures, indicating a continued focus on leadership expansion despite the funding slowdown.

[Trends]

AI remained the top investment theme: AI attracted the highest investor interest in July, with 15 deals worth $201.62 million. Emergent’s $130 million round and its entry into the unicorn club further strengthened the sector’s momentum.

Large ticket funding remained limited: July saw only one funding round above $100 million, while the second largest deals stood at $40 million. The gap highlights the continued scarcity of large late stage investments.

Zepto’s IPO delay remained a key market focus: Zepto postponed its planned IPO amid valuation discussions with investors. The decision drew significant attention as the company remains one of the most closely watched startup listing candidates.

Pronto’s wearable camera program sparked industry debate: Pronto confirmed that it is expanding its wearable camera initiative through its opt-in Pronto Verified service, which records service sessions and uses anonymized footage for AI training. The move triggered discussions around privacy and the use of AI in home services.

Flipkart prepared to enter food delivery: Walmart-owned Flipkart announced plans to enter India’s online food delivery market in the coming weeks. The move is expected to intensify competition for incumbents Zomato and Swiggy.