Startup funding may see a surge in 2025
Globally, the VC landscape is also gaining traction. Experts anticipate further acceleration as geopolitics stabilise and investor confidence returns.
Startup experts foresee a steady rebound in startup funding, driven by strong economic fundamentals and a focus on sustainable growth in 2025.
Founders who showcased operational resilience, sustainable metrics, and clear value-creation paths through the recent funding correction are poised to attract greater investor interest.
According to Bloomberg data, venture capital (VC) activity in India between January and November 2024 recorded $16.77 billion across 888 deals, up from $14.69 billion across 729 deals during the same period in 2023. This upward momentum is expected to accelerate in 2025.
“We have seen heightened interest in our portfolio companies from late-stage investors this year. Many companies have demonstrated profitability potential, underpinned by differentiated business models and a focus on real-world metrics,” said Sandeep Murthy, managing director at Lightbox India Advisors.
Globally, the VC landscape is also gaining traction. Experts anticipate further acceleration as geopolitics stabilise and investor confidence returns. Pranav Pai, founding partner and CIO of 3one4 Capital, stated: “The thawing of US tech IPO markets, rising public comparables, and India’s march past the $5 trillion GDP mark will create superimposed tailwinds for Indian entrepreneurs and private market funding”.
AI startups globally secured $18.9 billion in funding in Q3 2024, accounting for 28% of total VC investments, per Crunchbase data. In India, early-stage companies and sectors like deeptech, sustainability, and consumer technology are expected to drive funding growth in 2025. “The government’s favourable regulatory initiatives and growing institutional support are strong catalysts,” noted Somdutta Singh, investor at Karma Holdings.
However, the ecosystem is unlikely to replicate the frenetic funding pace of 2021–2022, often described as an era of “free money”. The 2023 funding winter, which saw volumes drop to $9.6 billion, prompted investors and founders to prioritise sustainable growth over aggressive expansion.
The year 2024 marked a recovery phase, with funding volumes growing 14% year-on-year to $10.9 billion. Public markets rewarded startups with strong financials, as seen with 12 companies, including Swiggy, Ola Electric, and FirstCry, successfully listing. More, such as Ecom Express and Ather Energy, are planning IPOs in 2025.
Experts believe this recalibrated funding environment will lead to a more balanced and selective approach. “We anticipate a shift toward sustainable unit economics, robust governance, and meaningful IPO outcomes,” said Pai.
The transition from speculative funding booms to mature, quality-driven growth signals a maturing startup ecosystem. “Investors are prioritising sustainability over quick exits. This will shape a healthier funding trajectory for years to come,” Singh said.
Source: https://www.financialexpress.com/sme-2/startup-funding-may-see-a-surge-in-2025/3702889/
