executive summary
India’s venture capital (VC)/growth equity market continued its upward trajectory in 2025, reaching approximately $16 billion, marking the second consecutive year of growth. This performance was particularly notable against a backdrop of weak overall private capital deployment.
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Unlike 2024, when trade volumes primarily drove the recovery, 2025 saw more balanced growth across trade volumes and average trade size. Larger ($100 million+) funding rounds have rebounded, particularly in software/software-as-a-service (SaaS) and fintech, with deals of $250 million or more doubling year over year. Small and medium-sized business activity is strong, with investors focused on innovation in artificial intelligence (AI), consumer technology, and fintech.
Consumer technology has entered a more cautious phase. Although large deals decreased in 2025 compared to 2024, the sector still recorded high deal activity compared to 2023.
Last year’s quick commerce (Q-commerce) rush has replaced last year’s rush of interest in vertical platforms that offer curated product assortments and tighter supply chains across categories such as fashion, food and baby care. Money continued to flow into large direct-to-consumer (D2C) brands in high-margin segments as investors prioritized retention-led growth and disciplined unit economics.
Fintech has recorded the strongest recovery this year, with transaction value more than doubling year-on-year. While payments make up the largest trading segment, investors are also expanding into subsectors with more predictable monetization models. For example, wealthtech has emerged as a key theme, supported by India’s increasing adoption of digital public infrastructure (DPI) rail, rising household savings, and a growing preference for goal-based investing, especially among the masses and ultra-high-net-worth individuals.
Software/SaaS funding increased approximately 1.5x year over year. Mature incumbents returned to the market in the 2021-22 cycle on the back of geographic expansion and AI-driven product evolution. AI and generative AI-native business-to-business (B2B) companies are also gaining traction, especially in vertical applications. In sectors such as banking, financial services, and insurance (BFSI) and healthcare, use cases have moved beyond pilots to production-scale automation in underwriting, compliance, revenue cycle management, and workflow enhancement.
Exit values were generally stable, but the composition changed. IPO-led liquidity events increased share, and strategic sales recovered significantly from their 2024 lows. Fintech and consumer technology accounted for the majority of exits. Deregulation, strong individual participation, and resilient stock markets supported new price discovery and execution certainty, strengthening the path from the private scale to public markets.
Funding has increased significantly. Funds raised by VC/growth equity funds doubled from the previous year to approximately $5.4 billion due to the rapid increase in the number of vehicles exceeding $100 million. The sharpening of thematic focus around AI, deep tech, climate, space and industrial technology signals India’s expanding venture ambitions.
India’s VC/growth ecosystem continues to mature and is characterized by disciplined capital deployment, improved exit path comfort, tighter governance, and clearer visibility into lasting value creation. Resilient consumption, sustained public capital investment and increased digital infrastructure spending supported this momentum. These conditions for steady and disciplined business expansion are expected to continue.
About IVCA
Indian Venture and Alternate Capital Association (IVCA) is a non-profit apex industry body promoting India’s alternative capital industry and fostering a vibrant investment ecosystem. IVCA is committed to supporting the ecosystem by facilitating advocacy discussions with the Indian government, policy makers and regulators, thereby contributing to the growth of entrepreneurial activity, innovation and job creation in the country and supporting India’s development as a leading capital management hub. IVCA represents more than 490 funds with total assets under management of more than $350 billion. Our members include some of the most active domestic and global venture capital and private equity funds, as well as funds focused on infrastructure, real estate, and credit. The association also includes limited partners, investment companies, family offices, corporate venture capital investors and knowledge partners. These funds invest across a wide range of strategies including early stage companies and emerging companies, venture growth, buyouts, special situations, distressed assets, credit, venture debt and more.
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