Indian VC Survey 2025: Key Findings

After a period marked by oversupply of capital and underpriced risk, the first quarter of 2025 reveals a structurally altered investment environment defined by tighter benchmarks, return to fundamentals and recalibrated capital flows.

To assess how VCs are adapting, Taghash and Datum surveyed 50+ Indian venture firms. The result is a data-backed view of investor sentiment, sectoral momentum, and structural bottlenecks shaping the next funding cycle.

Key Findings

1. Capital is returning but selectively. $3.2B was deployed in Q1 2025, marking a modest resurgence from 2023 lows. Deployment is concentrated in AI, fintech infrastructure, deeptech, and D2C. Secondary and strategic transactions now account for over 20% of capital deployed.
2. Investor sentiment has turned cautiously constructive.68% of respondents expect an improved fundraising environment in 2025, driven by stabilization in global macros, sector-specific conviction, and new domestic capital pools such as the ₹10,000 crore Fund of Funds.
3. AI is the core thesis, but discernment is rising.74% of VCs now prioritize AI-first startups. However, capital is flowing into companies with proprietary data, embedded use cases, and clear IP defensibility. Hype-stage models are being screened out.
4. Benchmarks have materially shifted.Series A thresholds have moved from ~$1M to ~$5M ARR in many categories. Investors are demanding operating leverage and capital efficiency far earlier in the life cycle.
5. Exits remain the single largest structural constraint.68% cite exit optionality as a limiting factor. India’s M&A infrastructure is underdeveloped, IPO windows are narrow, and strategic buyers are risk-averse outside of a few core sectors. GPs are now embedding exit design into upstream deal construction.
6. Capital formation challenges persist - especially for emerging managers.45% of VCs flagged LP formation as a major bottleneck. Domestic LP markets remain shallow, fragmented, and under-institutionalized, especially for funds below $100M. Many are reliant on opportunistic family office capital without re-up reliability.

Thematic Shifts in Portfolio Construction

Beyond capital movement, portfolio strategies are evolving:

• Shift from growth-at-all-costs to profitability as default.Majority of investors now prioritize margin-accretive models with clear paths to breakeven. Founders without cost discipline are increasingly deprioritized.
• Increased focus on Tier 2/3 markets and verticalized micro-funds.Specialist vehicles targeting underserved markets and industrial niches are seeing early momentum.
• Hardtech and manufacturing entering the thesis set.Robotics, photonics, and quantum infrastructure are gaining early-stage attention, though follow-on capital remains limited.

What VCs are Saying 

I’m deeply bullish on India’s deep-tech momentum. Geopolitical shifts are driving demand for tech sovereignty, and India is emerging as a key strategic player. With $10B+ in semiconductor incentives, national AI missions, and PLI schemes, the policy landscape is now aligned with long-horizon innovation, which was very much needed. What excites me most is the shift from software scale to core tech defensibility - world-class talent is now solving in quantum, robotics, and chip design. Capital is beginning to follow.

Anurag Ramdasan, Partner at 3one4 Capital

India’s consumer landscape is entering a phase of systematic brand creation. We’re particularly excited about the emergence of multi-category D2C and food brands—segments where agile, venture-funded teams consistently outperform incumbents on speed and relevance. As GDP per capita rises and discretionary spend deepens, this segment is primed for sustained M&A activity. 

Karthik Reddy, Co-founder & Managing Partner, Blume Ventures

The past two decades of India's startup growth have largely been about adapting successful models from the West and China, localizing them for Indian users, and building strong distribution networks. But as we move toward 2047, the next phase of India's startup journey will be fundamentally different — driven by solving uniquely Indian problems with deeply nuanced solutions.

Jai Sumer Singh, Co-founder and Partner at Riverwalk Holdings

Of all the segments that are of interest to the Indian venture capital ecosystem, the most interesting should be the manufacturing space considering how underserved the space currently is. However, this appears to be changing with interest coming in for both the deep tech and the manufacturing space. We believe for the country to progress. It’s essential that venture investing should happen in the manufacturing space.

Vignesh Shankar, Managing Partner at Artha99

Most VCs in the SaaS space have shifted their focus toward AI and deeptech.The rapid rise of LLMs has disrupted many of the original investment theses these funds were built around, forcing them to reevaluate and reshape their strategies. 

Vinod Shankar, Founding Partner at Java Capital 

In my view, there is a lot of opaqueness in the LP market space in India. At one end of the spectrum, we have family offices and HNIs who have invested in two or more funds, while at the other end, we have family offices and HNIs who do not yet understand venture capital as an investment option. We need education and awareness on VC as a different  class with its pros and cons  to potential LPs who have the capital. 

Radhesh Kanumury, Managing Partner at Suvan Ventures

Download the Full Report

The Indian VC Survey 2025 offers a comprehensive analysis of capital flows, sectoral bets, and structural dynamics reshaping Indian ventures.

👉 [Download the full report here]

Co-created by Taghash, a modern operating system for private capital managers and Datum, a research firm specializing in data-driven insights across emerging sectors with production support from Klavoza, a digital-first strategy and marketing studio.