VC fundraising in India breaches $3-billion mark, goes past 2024 total

VC fundraising in India breaches $3 billion mark in 2025, surpasses last year’s total

After a muted 2024, India’s venture capital fundraising is stirring back to life. Fund cycles are kicking in, exits are improving, and limited partners (LPs) are tilting towards markets that feel more predictable — and investable.

Venture capitalists say the pipeline of startups with strong fundamentals is growing, offering more high-quality opportunities than in recent years and drawing fresh capital into play.

So far this year, 18 venture capital firms have raised close to $3.2 billion, a Moneycontrol analysis has found, which is already ahead of the $2.7 billion India-focused funds raised in all of 2024 — a five-year low, as per a Bain & Company and Indian Venture and Alternate Capital Association (IVCA) report.

The resurgence has been driven by global as well as domestic names, including Accel ($650 million), A91 Partners ($665 million), Bessemer Venture Partners ($350 million), Cornerstone VC ($200 million) and Prime Venture Partners ($100 million).

Several more firms  such as Nexus Venture Partners, Fireside Ventures, and Info Edge Ventures are in the market to raise capital. If these fundraises close successfully, the total haul could reach $4.6 billion, even surpassing 2023’s $4-billion figure, marking a decisive shift from previous year’s slump.

"High-quality funds can raise capital in any cycle. Fund cycles are kicking in, and LP sentiment towards India is cautiously optimistic,” said Dr Pankaj Jethwani, Managing Partner at W Health Ventures, which recently announced a $70-million second fund.

“With China largely off the table for many Western LPs, there’s a significant pool of capital seeking a new home. India offers structural advantages — relatively safe borders, a growing engineering and AI talent base, and a large local consumer market,” he added.

For many fund managers, the recovery is tied as much to the quality of companies coming to market as to liquidity cycles. Bessemer Venture Partners, which closed its $350 million India fund earlier this year, credits both the macro backdrop and the improving calibre of startups for its bullish stance.

“India remains a highly attractive investment market, driven by strong macro fundamentals, a growing digital economy, and a deep talent pool,” said Anant Vidur Puri, Partner at Bessemer Venture Partners. He added that they are seeing more high-quality startups with stronger fundamentals — sustainable business models, capital efficiency, and clear paths to profitability.

The upturn is also being helped by attractive valuations and better exit opportunities.

Exits back in play

The exit momentum is visible in the public market. Thirteen startups, including Swiggy, Mobikwik, and Ola Electric, went public in 2024 , compared to five in the year before and just two in 2022. The momentum appeared to be carrying into 2025, with more than 25 startups looking at IPOs this year.

That said, market volatility has delayed some listings. Several firms though have filed DRHPs and are prepping for listings. These include Lenskart, Meesho, PhysicsWallah, Pine Labs, Urban Company, Wakefit, Groww and Shadowfax.

India’s relative macro stability is also pulling in more foreign capital. For offshore funds like Singapore-based Venturi Partners, which recently launched its $225 million second fund, that reallocation is becoming clear in LP conversations.

“India has become a net beneficiary” of capital moving away from weaker markets, said Rishika Chandan, Managing Partner at Venturi.

“From a positioning perspective, we are relatively less affected by tariffs, our exports to the US are about two percent of our GDP. So, investors are realizing that, while India may be an emerging market on paper, it is not actually an emerging market in terms of the underlying fundamentals. And it is becoming an important consideration in the asset allocation decisions that LPs are making,” she added.

Similar interest is returning among Indian LPs, though they remain selective and cautious, particularly about issues like governance.

“Governance has been a recurring concern for LPs, and Indian GPs are increasingly taking it seriously. We, along with other large funds, invest significant time and effort into governance and compliance,” said W Health Ventures’ Jethwani.

“However, sentiment is better than it was a year or two ago, and India is benefitting from it. I expect 2025 to outpace 2024, and 2026 to be even stronger,” he added.

If upcoming fund closes materialise and IPO and secondary markets keep offering liquidity, 2025 may mark a genuine reset — not a replay of 2021’s exuberance, but a cycle defined by bigger pools of capital chasing fewer, stronger bets.