India’s startup funding landscape is heating up again, but this time with a shift in tone and target. A slew of companies are either in talks or have recently closed late-stage rounds north of $100 million. But unlike the heady days of 2021, capital is now flowing to a focused cohort: profitable, disciplined businesses with strong fundamentals and IPO ambition.
Startups, including Jumbotail, Porter, Dhan, Groww, Zepto, Cred are preparing to raise $100 million or more. Others, like Darwinbox, Rebel Foods, and Rapido, among others, have already raised large rounds.
According to top investors and dealmakers Moneycontrol spoke to, the current funding uptick is not just a broad-based resurgence — it’s a recalibration. High-quality companies are continuing to close growth rounds, backed by investors sitting on dry powder.
With many of these startups now profitable or near-profitable, the deals are increasingly skewed towards secondary transactions—allowing early backers to exit without founders giving up more equity than necessary.
Targeted bets, consistent flow
Karan Sharma, Managing Director at Avendus Capital, said that while public markets remain volatile, quality private companies are still attracting capital. “High quality companies, irrespective of the volatile markets, are attracting quality private capital. And hence, we are seeing closures in these companies…most of the large funds are sitting on dry powder, so they will most certainly deploy.”
Indeed, several VC firms—Accel, Bessemer, Venturi Partners, Cornerstone Ventures—have launched new funds in 2025 after a hiatus, reflecting an increase in unallocated capital that is ready to be deployed.
But the focus is clear: startups with strong financial performance are drawing investor interest—not because they need capital, but because they’ve earned it.
“One common thread among all the companies raising large rounds right now is good financial metrics. These firms have been performing better, on both profitability and growth, than what we have seen in the past,” said Kashyap Chanchani, Managing Partner at The Rainmaker Group.
Valuations get a reality check
However, a key difference from the 2021 funding frenzy is the recalibration of valuations and expectations - by both founders and investors.
“There will be more rationality now,” said Sandeep Singhal, co-founder and Managing Partner at WestBridge Capital. “Even if you look towards public markets, the companies that have gone public have settled down to a place where they're more reflective of their real valuation…So, the same rationality will be part of the process of growth stage investments.”
Many marquee startups - Paytm, Nykaa, Delhivery, Ola Electric, FirstCry - are now reportedly trading below issue price, underscoring how far the pendulum has swung.
The size of rounds has come down as well. “A bulk of the transactions today are in the $70 million to $250 million zone, with the average in the $75-100 million range,” Sharma said. That’s a stark contrast from the $300-700 million megadeals of 2021-22 involving companies like Swiggy, Verse Innovation, and Dream11.
Chanchani added that investors are now valuing companies on EBITDA multiples, and many startups are willing to align with current market pricing.
IPO delays = more secondary deals
With IPO markets now volatile, industry watchers expect that many startup IPOs this year might be delayed. But capital raises haven’t stopped—secondary-heavy rounds are filling the gap.
Zepto, for instance, is in talks to raise $250-300 million via a secondary share sale to bring more domestic investors on board ahead of a public listing. Rebel Foods’ $210 million round in December was nearly 75 percent secondary. Others like Porter are exploring similar options.
Moneycontrol previously reported that $100 million+ funding rounds were making a comeback, supported by startups conducting large pre-IPO secondary transactions—like Rebel Foods, Purplle, and Lenskart.
“Most of the quality companies eyeing IPOs do not need the capital,” Sharma noted. “They’re comfortable with their cash positions and unit economics. So, there’s a luxury to wait and time the market better.”
As a result, 2025 may see fewer startup IPOs than previously expected. While over 25 startups are slated to go public this year, up from 13 in 2024—many are expected to delay their timelines due to macroeconomic uncertainty.
However, these deferrals are expected to bolster late-stage funding, as startups are expected to raise secondary pre-IPO rounds to meet their capital requirements and give their investors an exit, said Chanchani.
Investors remain upbeat, yet selective
Despite global headwinds, India’s private markets are expected to remain active for high-performing startups willing to go for rational valuations, say investors.
Companies that have survived and achieved a certain scale have become a potential opportunity target for growth funds. For the startup ecosystem, this means that companies that scale and find the right product market fit will have growth stage investors waiting for them, concluded WestBridge’s Singhal.
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