India VC Investment Dips to USD 2.4 Billion in Q1 2025

New Delhi, Apr 22 (PTI) Venture Capital (VC) investment in India declined to USD 2.4 billion in January-March 2025 from USD 2.6 billion in the preceding quarter as investors remained wary amid the current geopolitical situation, according to a report by KPMG.

Looking ahead, the report said that VC investment in India could remain "somewhat soft" in the second quarter of 2025 although the long-term outlook remains positive given the country's strong macros.

"India saw VC investment drop slightly from USD 2.6 billion in Q4'24 to USD 2.4 billion in Q1'25," said KPMG Private Enterprise's Venture Pulse-- a quarterly report tracking investment trends globally across major regions around the world.

It noted that capital markets also took a beating in India during the quarter amid concerns of overpricing. While markets recovered somewhat in the second half of Q1 2025, the general trajectory was lower than initially expected in Q4 2024.

VC investors in the country remained highly focused on consumer offerings in the quarter under review with areas such as e-commerce and quick commerce attracting maximum attention. Further, payments and lending also continued to be a key sector of investment in India.

"The most important thing in India right now is that the macros are intact. Nothing fundamentally has changed. The money has started coming back to India. There are certain large IPOs of startups that have been announced, which should hit the market over the next one or two quarters. I think we are back in business — and what we're seeing now is really just a minor impediment — a speedbump," Nitish Poddar, Partner and National Leader - Private Equity, KPMG in India, said.

Apart from India, VC investment and deal volume in the Asia Pacific region dropped to USD 12.9 billion across 2,149 deals in Q1 2025 — the lowest levels the region has seen in over 10 years.

VC funding declined consistently across the region, with China seeing a drop from USD 10.9 billion to USD 6 billion quarter-over-quarter. Japan saw a decline from USD 1.1 billion to USD 900 million. However, Singapore was the sole bright spot in the region, with VC investment rising from USD 880 million to USD 1.7 billion.

Overall, Global VC investment surged from USD 118.7 billion in Q4 2024 to an 11-quarter high of USD 126.3 billion in Q1 2025, despite ongoing geopolitical conflicts and tensions, continued concerns about global trade and tariffs, and the delay of a major reopening in the IPO market. The overall increase in the deal value was largely driven by a series of mega-rounds by AI companies, the report noted.