<p>Bengaluru: The coming year will highly likely be a better year for fundraising for startups, industry insiders and venture capital firms (VCs) told <em>DH</em>. Startup founders too believe that in 2025, the private capital market will be stronger than in 2024.</p><p>From the boom in 2021, the latter half of 2022 saw a downturn which continued to 2023 in a prolonged funding winter. 2024 saw an uptick with a better year in startup funding and deal flows.</p><p>So far, 2024 has seen $10.9 billion invested in Indian startups while in 2023, the amount was $9.6 billion, as per data from Venture Intelligence.</p><p>VCs like Athera Venture Partners and Unicorn India Ventures made a higher than normal number of investments, with the former making five deals, up from two to three deals per year and the latter making 11 from its new fund with some in the pipeline, against an average of seven to eight.</p>.Nearly half the startups in India have at least one woman director.<p>“A lot of private venture capital in India have been raising new funds. A lot more fundraise happened in 2024, because those who raised in 2021 had exhausted their funds. There is a lot more capital available for deployment as a result of which obviously you will see a lot more startups getting funded,” explained Rajiv Mehta, General Partner <br>at Athera.</p><p>The direction of global wealth has also had an impact.</p><p>“Right now, a lot of capital is sitting in debt funds in the US because of high interest rates. I expect two or three or more rate cuts next year, which will mean that more liquidity will be there. Because of the volatility and government change, some investments are hanging, but as soon as the new administration takes its place, the equity markets will give a good response which will mean that more money will come into the investment side,” said Madhukar Sinha, founding Partner, India Quotient.</p>.<p>The United States Federal Reserve has forecast two interest rate cuts in 2025.</p><p>Anil Joshi, Managing Partner at Unicorn India Ventures said that funds are closing amounts upwards of $100 million, with many in the process of closing funds. He expects funding 2025 to be at least 50-100% more than 2024.</p>.Modi govt push prompts investors to zero in on defence startups.<p><strong>IPO boom to continue</strong></p><p>2024 has been a good year for returns and exits as well. VC exits in India have amounted to $2.74 billion so far, according to Venture Intelligence. There was also a flurry of startup initial public offerings (IPOs), which investors expect to consistently continue for the next couple of years. There were 11 VC-backed IPOs in India raising an amount of $3.2 billion.</p><p>“It is just the beginning. The way we are seeing the IPOs getting filed up, it is anticipated that till 2030, a substantial number of companies will be getting listed, both the normal and startups,” said Joshi.</p><p>Some firms that Athera is investing in are looking at going public in 2025, while some of India Quotient’s are preparing to list in 2026-27. Unicorn expects two to three companies from their second fund to list in 2027-28.</p><p>Beyond the rising capital, some gaps remain left unfulfilled.</p>.<p>“Series A has turned out to be India’s biggest short-term challenge,” said Sanjay Swamy, Managing Partner at Prime Venture Partners. “Big companies that are successful will always find capital; that is irrelevant. The real question is whether we are driving more entrepreneurship. Series A is the hardest round right now with very few sources in India.”</p><p>Startups also cautioned that even though they have managed to raise funds, the volatile environment does pose its challenges. At the same time, global funds showing interest in India gives them a boost.</p><p>While the jury is still out on whether the winter has ended, things are <br>clearly improving.</p>
<p>Bengaluru: The coming year will highly likely be a better year for fundraising for startups, industry insiders and venture capital firms (VCs) told <em>DH</em>. Startup founders too believe that in 2025, the private capital market will be stronger than in 2024.</p><p>From the boom in 2021, the latter half of 2022 saw a downturn which continued to 2023 in a prolonged funding winter. 2024 saw an uptick with a better year in startup funding and deal flows.</p><p>So far, 2024 has seen $10.9 billion invested in Indian startups while in 2023, the amount was $9.6 billion, as per data from Venture Intelligence.</p><p>VCs like Athera Venture Partners and Unicorn India Ventures made a higher than normal number of investments, with the former making five deals, up from two to three deals per year and the latter making 11 from its new fund with some in the pipeline, against an average of seven to eight.</p>.Nearly half the startups in India have at least one woman director.<p>“A lot of private venture capital in India have been raising new funds. A lot more fundraise happened in 2024, because those who raised in 2021 had exhausted their funds. There is a lot more capital available for deployment as a result of which obviously you will see a lot more startups getting funded,” explained Rajiv Mehta, General Partner <br>at Athera.</p><p>The direction of global wealth has also had an impact.</p><p>“Right now, a lot of capital is sitting in debt funds in the US because of high interest rates. I expect two or three or more rate cuts next year, which will mean that more liquidity will be there. Because of the volatility and government change, some investments are hanging, but as soon as the new administration takes its place, the equity markets will give a good response which will mean that more money will come into the investment side,” said Madhukar Sinha, founding Partner, India Quotient.</p>.<p>The United States Federal Reserve has forecast two interest rate cuts in 2025.</p><p>Anil Joshi, Managing Partner at Unicorn India Ventures said that funds are closing amounts upwards of $100 million, with many in the process of closing funds. He expects funding 2025 to be at least 50-100% more than 2024.</p>.Modi govt push prompts investors to zero in on defence startups.<p><strong>IPO boom to continue</strong></p><p>2024 has been a good year for returns and exits as well. VC exits in India have amounted to $2.74 billion so far, according to Venture Intelligence. There was also a flurry of startup initial public offerings (IPOs), which investors expect to consistently continue for the next couple of years. There were 11 VC-backed IPOs in India raising an amount of $3.2 billion.</p><p>“It is just the beginning. The way we are seeing the IPOs getting filed up, it is anticipated that till 2030, a substantial number of companies will be getting listed, both the normal and startups,” said Joshi.</p><p>Some firms that Athera is investing in are looking at going public in 2025, while some of India Quotient’s are preparing to list in 2026-27. Unicorn expects two to three companies from their second fund to list in 2027-28.</p><p>Beyond the rising capital, some gaps remain left unfulfilled.</p>.<p>“Series A has turned out to be India’s biggest short-term challenge,” said Sanjay Swamy, Managing Partner at Prime Venture Partners. “Big companies that are successful will always find capital; that is irrelevant. The real question is whether we are driving more entrepreneurship. Series A is the hardest round right now with very few sources in India.”</p><p>Startups also cautioned that even though they have managed to raise funds, the volatile environment does pose its challenges. At the same time, global funds showing interest in India gives them a boost.</p><p>While the jury is still out on whether the winter has ended, things are <br>clearly improving.</p>