Funding Landscape Stabilizes at $26.4B: The Rise of “Credible Capital” in H1 2025

By Santosh Sinha | Venture Capital & Startups Desk Date: November 28, 2025

Bengaluru: The dust has settled on the chaotic valuation wars of the early 2020s. As per the latest market data for H1 2025, India’s private equity and venture capital landscape has found a new, solid floor. With $26.4 billion in deals recorded in the first half of the year, the ecosystem has officially transitioned from a phase of “Exuberance” to one of “Endurance.”

While the headline number represents a statistical dip from the previous year’s highs, industry veterans are reading the tea leaves differently. They argue that this isn’t a recession—it’s a stabilization. The market has corrected itself, replacing “Growth at All Costs” with a far more sustainable mantra: Credible Capital.

The $26.4 Billion Reality Check

The H1 2025 figure of $26.4 billion (across 593 deals) indicates that while the faucet hasn’t run dry, the filter has tightened significantly.

The “Fear of Missing Out” (FOMO) that drove investors to write blank checks for pre-revenue ideas has vanished. In its place is a rigorous diligence process that privileges Unit Economics over Vanity Metrics.

“The era of valuing a company based on its user base is over. In 2025, if your Customer Acquisition Cost (CAC) doesn’t make sense relative to your Lifetime Value (LTV), you aren’t getting a meeting, let alone a term sheet,” says a managing partner at a leading Mumbai-based VC firm.

The Shift to “Credible Capital”

What does “Credible Capital” mean for the Indian founder?

It means that capital is now chasing predictability. The standout sectors in H1 2025 were not the cash-burning consumer apps of the past, but “Real Economy” businesses:

• DeepTech & AI: Startups building proprietary intellectual property (IP) rather than just aggregating services.
• CleanTech & EV Infra: Capital-intensive but asset-heavy sectors that promise long-term, compounding returns.
• Manufacturing MSMEs: A surprise entrant to the VC portfolio, driven by the “China+1” supply chain shift.

This trend validates the rise of platforms like StartApp Guru, which have been evangelizing the need for “financial discipline before funding.” The market has effectively caught up to the philosophy that a business must be profitable before it scales, not after.

The “Vanity Metric” Trap is Closed

For years, Gross Merchandise Value (GMV) and “Active Users” were the golden tickets to unicorn status. In H1 2025, these metrics have been relegated to the backseat.

Investors are now demanding “North Star” metrics that reflect true health:

• Net Revenue Retention (NRR): Are your old customers staying?
• Gross Margin Profiles: Are you actually making money on every unit sold?
• Burn Multiple: How much cash are you burning to generate every new dollar of revenue?

Outlook for H2 2025

As we move into the second half of the year, the $26.4 billion floor offers a strong foundation. The “tourist investors” have left the building, leaving behind a cohort of serious, long-term backers committed to the India story.

For founders, the message is clear: The money is there ($26.4 billion of it), but it demands respect. Build a credible business, and the capital will follow.