Funding Freeze or Calm Before the Storm? Indian Startups Face a Crunchy April

Can India’s startup dreams weather the global storm?

That’s the question on everyone’s mind as April rolls in with a grim breeze. The mood in the Indian startup ecosystem remains restrained, even as venture capital (VC) funds continue to trickle in at a steady—if not spectacular—pace. The optimism of earlier years has been replaced with cautious calculation, as both founders and funders navigate through a foggy economic landscape shaped by international trade tensions and subdued investor sentiment.

Despite the cloud, there are sparks of action—but not enough to call it a revival.

Indian Startup Fudning: Weekly Snapshot

For the second week of April (April 5–11), Indian startups raised $209 million across 23 funding deals. It’s a marginal uptick from the $202 million recorded the previous week, but hardly enough to set off celebratory confetti.

The real story lies in what’s not happening. There hasn’t been a single funding transaction exceeding $100 million in the past four weeks—a telling indicator of the cautious capital flow currently gripping the ecosystem.

What’s Holding Things Back?

The biggest shadow over the startup landscape is global uncertainty, particularly the tariff wars instigated by former U.S. President Donald Trump. While the battles may seem distant, the ripple effect is real. Investors, watching international policy unfold like an unpredictable drama, are hesitant to place big bets.

“This is a period of wait-and-watch,” says a Bengaluru-based VC who preferred to remain anonymous. “The money isn’t gone—it’s just sitting on the fence.”

Who Got Funded? Bright Spots in a Dim Landscape

Amidst the lukewarm flow of capital, some startups did manage to clinch noteworthy deals:

Among these, Juspay’s $60 million raise served as the week’s biggest deal—and without it, the total figure would have looked much weaker. In many ways, Juspay propped up the week’s funding narrative single-handedly.

M&A Movements: Strategic or Distress Sales?

While funding might be dry, mergers and acquisitions are heating up—though not always for the right reasons.

• Delhivery acquired Ecom Express, consolidating its logistics footprint.

• Good Glamm Group divested MissMalini Entertainment, a move seen more as a necessity than a strategy.

Both transactions, according to insiders, occurred at significantly lower valuations than previous rounds, raising the question: Are we witnessing a wave of distress sales?

“These aren’t growth acquisitions. These are survival deals,” commented a Mumbai-based startup analyst.

Silver Linings: Global Bets on Indian Resilience

There’s one ray of hope piercing through the clouds.

Expert Dojo, a Southern California-based VC firm, has launched a new $100 million global fund, with $15 million earmarked specifically for Indian startups. It’s a signal that while domestic funding might be tightening, global players still believe in the Indian growth story.

And it’s not just about the money—it’s about momentum.

Take Zepto, for example. The quick commerce unicorn is approaching $4 billion in annualised Gross Order Value (GOV)—a staggering 4x year-over-year growth, and a 30% rise since January. Zepto’s growth proves that with the right model and execution, startups can still surge ahead—even in stormy weather.

Startup Funding Tightropes and Tough Calls

The Indian startup landscape isn’t flatlining—it’s recalibrating.

Capital is available, but caution is the name of the game. Mega-deals are missing, growth-stage startups are being forced to prove sustainable traction before raising funds, and exits are happening under less-than-ideal terms.

This phase, while uncomfortable, could be necessary. It’s forcing startups to cut flab, focus on fundamentals, and build resilience—qualities that could lead to stronger, leaner ventures in the future.

The funding winter may not be over, but spring isn’t cancelled either. With global interest in Indian innovation still intact and early signs of recovery showing up in unicorns like Zepto, the ecosystem just might be preparing for its next leap.

The journey from seed to scale has always been hard—but for India’s startups, perseverance might just be the best pitch in uncertain times.