India, Dec. 26 -- As 2025 draws to a close, the contours of India's venture capital market look clearer than they appeared at the start of the year. The fund hasn't fizzled out of the system, but investors seemed more reluctant on parking their money.

What made VCs risk-shy this year? While funds froze sitting on dry power, deployment slowed down as exit uncertainties became the wet blanket. Valuations went into a reset and limited partners stepped up scrutiny.

An Inc42 report on funding at the end of the first half of 2025 showed that startups had so far raised about $5.7 Bn, with the full-year projection exceeding $15 Bn. By mid-December, however, total funding stood at roughly $11 Bn across 936 deals, marking a slump in both funds ra...