“India’s long-term venture opportunity is anchored in powerful structural drivers—rapid digital adoption, expanding domestic capital markets, policy-led levers, and a deep technology talent pool. While periods of disruption, such as the ongoing geopolitical situation, may temper deal activity in the near term and extend holding periods due to valuation gaps between buyers and sellers, this is likely to be followed by a meaningful rebound, supported by India’s underlying growth fundamentals. India will continue as an attractive innovation ecosystem for venture investors and looking ahead, we expect investor conviction to build across several tech-first areas, including AI, deeptech, quick commerce, and clean energy”, Prabhav Kashyap, Partner at Bain & Company said.
According to the report, fund-raising also saw a significant increase. “Capital raised by VC/growth equity funds doubled year over year, reaching approximately $5.4 billion, driven by a surge in $100+ million vehicles. Thematic focus sharpened around AI, deep-tech, climate, space, and industrial technology, signalling a broadening of India’s venture ambition”.
The report noted that the quick commerce (Q-commerce) rush of 2024 was replaced by focused interest in verticalized platforms offering curated assortments and tighter supply chains across categories such as fashion, food, and baby care. It said that capital continued to flow to scaled direct-to-consumer (D2C) brands in higher-margin segments, with investors prioritizing retention-led growth and disciplined unit economics. In the fintech segment, the report says VC deployment posted one of the year’s strongest rebounds, with deal value more than doubling year over year. “While payments made up the largest transaction segments, investors also expanded into subsectors with more predictable monetization models. For example, wealthtech emerged as a key theme, supported by increased adoption of India’s digital public infrastructure (DPI) rails, rising household savings, and a growing preference for goal-based investing, particularly among the mass and mass affluent segments”, it said.
