VCs stockpile cash in 2025 as startup funding stays flat

While startup fund inflows remained largely flat through the last week of 2025, increasing interest from major venture funds signals renewed optimism for the Indian market.

According to Entrackr, India-focused venture capital firms have raised over $4.2 billion so far, with several large funds poised to bring in additional capital for deployment over the next few months. Meanwhile, startups have secured $4.4 billion in funding in 2025 to date, a figure that remains relatively unchanged compared to previous years.

Peak XV, which had allocated $2 billion for investments in India in 2022, is now preparing to raise a new fund in the range of $1.2 to $1.4 billion. This would mark its largest India-focused fund so far in the current calendar year. Notably, the Silicon Valley-based firm downsized its previous fund by 16% and is now raising its first independent fund following its separation and rebranding from Sequoia Capital.

Meanwhile, A91 Partners, founded in 2018 by former Peak XV partners, already announced the final close of its third fund at $665 million. Venture capital firm Accel also unveiled its eighth fund worth $650 million to support early-stage startups in India and Southeast Asia.

A91 expanded the size of its third fund by 20%, while Accel maintained the same fund size as its previous India-focused Fund VII.

Bessemer Venture Partners closed a $350 million early-stage venture fund, while Fireside Ventures is reportedly in talks to raise $230 million for its fourth fund. Tanglin Venture Partners, a venture capital firm founded by Ravi Venkatesh, a former Tiger Global executive, is also gearing up to raise $250 million for its third fund.

Besides venture capital activity, the Indian government has also launched startup-focused initiatives, including a Rs 1,000 crore (approximately $117 million) funding scheme to support space sector startups, and a commitment of Rs 10,000 crore (approximately $1.17 billion) through a Fund of Funds (FoF) managed by the Small Industries Development Bank of India (SIDBI).

All the activity indicates that good ideas will continue to find a ready market, and startups which have made progress on their product market fit, even more so. It remains difficult to call sectors that will be favourites, although the quick commerce sector could easily turn shares lopsided with one big fundraise. But fintech remains an ever present likelihood, even as climate tech might struggle the most due to the Trump effect. The IPO of an Ather will be a big positive as and when it happens, considering the long way the firm still has to go yet. But the signs are clearly good, and expect Q3 this year to be around when deal sizes and volumes will truly hit their stride.