In a significant turnaround, India’s venture capital (VC) funding surged to $13.7 billion in 2024, marking a 1.4x increase from the previous year’s $9.6 billion, according to Bain & Company’s India Venture Capital Report 2025. This robust recovery defied global trends, as funding across the broader Asia-Pacific region remained stagnant. The number of deals also saw a remarkable 45% increase, rising from 880 in 2023 to 1,270 in 2024, signalling a strong resurgence in investor confidence.
The revival was largely driven by a wave of small- and medium-ticket deals, which accounted for 95% of total transactions, alongside a near doubling of $50 million-plus deals, bringing them back to pre-pandemic levels. This appetite for high-quality assets was reflected in marquee investments in Zepto, Meesho, and Lenskart. However, the average size of megadeals ($100 million and above) shrank by 20%, as investors and founders adopted a more conservative approach to valuations. Despite this, the number of newly minted unicorns increased to five, up from just two in 2023.
Consumer tech and AI take centre stage
Consumer technology emerged as the biggest winner, attracting $5.4 billion, a 2.3x growth from the previous year. This sector, spanning e-commerce, travel tech, gaming, and edtech, accounted for more than 60% of total VC investments. Quick commerce, in particular, experienced explosive growth, fueled by rapid customer adoption and business models with clear profitability pathways.
Generative AI funding also saw a sharp uptick, growing 1.5x year-on-year, as both AI-native startups and companies investing in AI capabilities drew investor interest. This trend mirrored global shifts, but India’s focus remained on AI applications and platforms rather than capital-intensive foundational models.
Beyond technology, traditional sectors like banking, financial services, and insurance (BFSI) and consumer/retail saw 3.5x and 2.2x growth, respectively. The fintech sector expanded well beyond lending, with businesses adopting more diversified digital-first solutions. Investors also took note of premiumisation in consumer brands, as Indian startups aimed to match global quality and experience standards.
Traditional sectors gain ground as IPOs surge
Exit activity remained strong, touching $6.8 billion, with public market exits rising from 55% to 76% of total exit value. This was driven by a sevenfold increase in IPO exits, fueled by improved liquidity, regulatory reforms, and a backlog of tech companies waiting to go public.
What to expect in 2025
Despite the positive momentum, fund-raising activity remained subdued, dropping 35% to $2.7 billion, the lowest level since 2020. However, the emergence of maiden funds, now comprising one-third of total VC/growth capital, indicates a diversification of investor profiles and targeted funding themes, including climate tech, deep tech, and semiconductors.
Looking ahead to 2025, the Bain report suggests that growth-stage investments will rise, with investors focusing on sectors such as energy transition and AI-driven solutions. With regulatory reforms, strong macroeconomic fundamentals, and a resilient startup ecosystem, India is well-positioned to solidify its standing as the second-largest VC destination in the Asia-Pacific region.