India’s venture debt landscape showed steady momentum in the first half of 2025, with some of the top funds — Stride Ventures, Trifecta Capital and Alteria Capital — collectively deploying over Rs 2,100 crore across more than 130 deals, signalling sustained demand for structured debt even as equity capital remains selective.
Stride Ventures led the pack with Rs 800 crore deployed across 47 deals, followed by Trifecta Capital, which deployed Rs 690 crore across 43 companies. Alteria Capital also saw similar levels of deployment, where it invested Rs 700 crore over 41 deals in the first half of this year.
Venture debt is a type of loan offered to Series A-and-above startups with institutional backing, and includes equity warrants in addition to the debt component. These equity kickers are typically about 10% of the debt quantum and usually translate to less than 1% ownership in the firm on a fully diluted basis.
Large follow-ons and early-stage bets
While the overall deployment figures are largely in line with the year-ago period, fund managers indicate that the nature of capital deployment is evolving. Trifecta Capital, for instance, noted a more concentrated allocation this year.
Large follow-on rounds in mature portfolio companies such as DeHaat (Rs 200 crore), Kissht (Rs 100 crore), and BharatPe (Rs 50 crore) accounted for a significant share of its capital, alongside new investments in early-stage startups like Baaz Bikes and Fabheads Automation. Meanwhile, Stride Ventures invested Rs 85 crore in QSR chain Wow Momo and $6.5 million in agri-commerce company WayCool Foods in the first half of the year.
“While demand from early-growth and growth-stage companies has always been strong, we’re now seeing a marked shift among younger startups — startups raising their first institutional equity round – Series A and even pre-Series A – who are increasingly open to blending venture debt with their equity raises,” said Abhijit Joshi, Director, Trifecta Capital.
Extension, growth, and capital efficiency
For smaller venture debt funds, such as one by Singapore-based investment firm Lighthouse Canton, this year is seeing much higher traction in new deals. In H1 2025, it deployed Rs 125 crore across 11 new deals, marking a significant increase from the same period last year, during which it closed 5 new deals totalling Rs 47 crores, said Ankit Agrawal, executive director of asset management, venture debt.
With equity capital still flowing selectively, venture debt is being increasingly used as both a runway extension tool and for growth-oriented initiatives. Capital-efficient and near-profitable companies are turning to venture debt to avoid early dilution, while younger companies are using it for expanding into new verticals or geographies, scaling up marketing, and working capital needs.
“There is a definite uptick in the use of venture debt, primarily for runway extension. Startups are leveraging it to bridge funding rounds, avoid down-rounds, and preserve valuations without diluting equity,” Agrawal said.
The first half of 2025 reflects this dual trend. Milestone-based disbursements and tailored working capital solutions are becoming more mainstream, as startups look to maintain momentum without engaging in valuation resets. “This mix of use-cases is indicative of a maturing ecosystem,” said an investor. “Founders today are far more directional about capital.”
The traction in venture debt also comes at a time when private equity and venture capital investors remain cautious, resulting in longer funding cycles and greater scrutiny around.