India's Venture Capital Confident in 2025 Amid Global Challenges

Venture capital in India surged in 2024, with USD 16.77 billion invested across 888 deals, driven by growth in technology and consumer sectors. Despite global uncertainties, experts predict sustained growth, focusing on IPOs and late-stage funding. China's VC market faces a downturn amid regulatory and economic challenges.

From January to November 2024, venture capital activity in India hit a high, amassing investments of USD 16.77 billion across 888 deals, according to the India Brand Equity Foundation (IBEF). This represents a 14.1% increase in value and a 21.8% rise in deal volume compared to the same period the previous year.

The tech sector played a significant role, securing USD 6.5 billion, marking a 52.5% year-over-year surge. Following closely was the consumer discretionary sector with USD 2.3 billion, while the financial sector saw a slight decline to USD 2.2 billion. Notable deals included Zepto's USD 1.3 billion funding and Poolside AI SAS securing USD 500 million. Industry experts remain optimistic about continued growth into 2025, expecting more IPOs and increased late-stage funding as funds resume capital deployment.

Analysts like Bhaskar Majumdar and Sajith Pai forecast a positive transition in India's startup ecosystem in 2025, despite concerns about economic reliance on the 'India1' segment. Confidence is bolstered by strong savings and steady capital inflows. Emerging sectors such as electric mobility and green hydrogen offer new prospects, while traditional fields like fintech and e-commerce remain appealing. Additionally, ventures driven by intellectual property in deep tech areas like robotics and drones are gaining attention amidst a transforming international landscape influenced by the new US administration and its effect on capital flows.

(With inputs from agencies.)