VC fundraising in India 2025: where fund money came from
Indian VC and growth equity funds raised about $5.4 billion in 2025, roughly double the year before, by Bain's count. More of it came from home: IVCA says domestic LPs, family offices included, now supply 52.7% of capital in Category I and II funds, and the government's Fund of Funds has backed over 145 AIFs.
By Akshay Kendurkar, CEO, MyStartupValley
Startup funding totals tell you what venture funds spent. Fundraising tells you what they will be able to spend next, and on what terms. In 2025 the second number moved more than the first.
This note covers how much Indian VC funds raised in 2025, who gave them the money, and why the answer matters to the founders and angels downstream. It sits next to our map of how capital moves in India.
How much did Indian VC funds raise in 2025?
Indian VC and growth equity funds raised about $5.4 billion in 2025, double the year before, by Bain's count. Inc42, which counts fund announcements rather than money actually raised, put new VC fund announcements above $13.6 Bn, against $8.7 Bn in 2024. Both trackers point the same way: up.
Bain's India Venture Capital Report 2026 gives the $5.4 billion figure for capital raised by VC and growth equity funds. Inc42's 2025 review gives the announcement totals. The gap between them is mostly method.
| Tracker | What it counts | 2025 |
|---|---|---|
| Bain | Capital raised by VC and growth equity funds | about $5.4 billion, double 2024 |
| Inc42 | New VC fund announcements | over $13.6 Bn, up from $8.7 Bn |
An announcement is a target. A fund that announces a target may close at half of it, or close over several years. So use Bain's number for money in hand and Inc42's for intent, and never add them.
Who were the LPs behind that money?
More of the money came from inside India. IVCA says domestic LPs, including family offices and domestic institutions, now supply 52.7% of capital in Category I and II AIFs, the categories that hold venture funds. The government's Fund of Funds is one of those domestic sources. Foreign LPs still supply much of the rest.
The 52.7% figure comes from IVCA's president at the IVCA Forum, citing a report by IVCA, 360 ONE Asset and CRISIL, as Entrackr reported in December 2025. The same report put AIF commitments at Rs 13.49 lakh crore in 2025, against Rs 0.84 lakh crore in 2017.
Domestic LPs
New funds are leaning on Indian money from the start. 360 ONE Asset's head of early-stage VC told Inc42 that about 39% of new funds had a fully domestic LP base in 2025, against 20% two years earlier. That's one practitioner's estimate, not a census, but it points the same way as IVCA's figure.
The intent is stronger still. In an Inc42 survey published in April 2026, about 74% of more than 70 institutional investors said they would prefer Indian-origin LPs in their next fundraising cycle.
Family offices
Family offices are the fastest-growing piece of the domestic pool. Artha Group's Jashank Pohani told Inc42 their number grew from roughly 45 in 2018 to over 300 as of 2024. They back funds and invest directly, often both at once, as our note on how family offices invest in startups explains.
The government's Fund of Funds
The Fund of Funds for Startups, run by SIDBI with a Rs 10,000 crore corpus, invests only through SEBI-registered AIFs. A June 2026 PIB backgrounder says the corpus is committed to over 145 AIFs, which have invested more than Rs 25,500 crore in over 1,370 startups.
A second Rs 10,000 crore fund won cabinet approval in February 2026, TechCrunch reported, aimed at deep tech, manufacturing, early-stage founders and smaller funds beyond the big cities. Our Fund of Funds 2.0 explainer covers its four segments.
Foreign LPs
No tracker we checked publishes a clean domestic and foreign split for 2025 fundraising. What we can see is direction. Inc42's April 2026 reporting says the overall pool of global capital available for Indian startups has shrunk, and dependence on foreign capital has fallen.
Whoever writes the cheque to the fund shapes the cheque the fund writes.
What does this mix of money back?
Domestic LP money mostly backs seed to mid-stage funds, because Indian funds are smaller. One growth investor told Inc42 that domestic growth funds can write $30 to 50 Mn cheques and the pool doesn't widen much beyond that. The largest rounds still depend on foreign funds.
That quote, from Arkam Ventures' Rahul Chandra, appears in Inc42's Q1 2026 analysis of a quarter with few mega deals. Tracxn's 2025 count shows the same squeeze from the other side: 14 rounds of $100 million or more, down from 19 in 2024, as TechCrunch and PTI reported.
SEBI's data shows how small venture is inside the AIF world. At 30 June 2026, Category I venture capital funds held commitments of Rs 52,970 crore and angel funds Rs 10,987 crore. Category II, which also holds private equity and debt funds, held Rs 13,02,837 crore. Our AIF data explainer breaks that down.
On the ground, investors are fewer and more Indian. Tracxn counted about 3,170 investors in Indian funding rounds in 2025, down 53% from about 6,800, with India-based investors accounting for nearly half of that activity, according to TechCrunch.
Why does the LP mix matter to founders and angels?
The LP mix shapes what a fund can back and how it plans to exit. A fund raised in rupees from Indian family offices and the Fund of Funds tends to write smaller cheques, invest in India-registered companies and look to Indian IPOs and secondary sales for exits. A fund backed by foreign LPs can write larger rounds.
For a founder, that means asking a fund where its money comes from is a fair diligence question. A fund backed by the Fund of Funds carries the scheme's priorities, such as deep tech or investing outside the metros. A fund that leans on one family office may move at that family's pace.
For an angel, it changes who comes next. If domestic funds dominate seed and Series A, a startup's follow-on round is more likely to come from an Indian fund with a cheque of a few million dollars than from a global growth fund.
What should you watch in 2026?
Watch three numbers: Bain's 2026 fundraising total, due around April 2027, the first commitments under Fund of Funds 2.0, and SEBI's quarterly Category I figures. Together they show whether domestic money keeps growing or only replaced foreign money that left.
- Fund closes, not announcements, from the same tracker each year.
- Fund of Funds 2.0 commitments by segment, once SIDBI begins reporting them.
- Category I venture fund commitments in SEBI's quarterly data.
The short version for 2025: funds raised more, and more of it came from home.
Questions
How much did Indian VC funds raise in 2025?
Bain's India Venture Capital Report 2026 says capital raised by VC and growth equity funds doubled in 2025 to about $5.4 billion. Inc42 counts announcements instead of closes and puts new VC fund announcements at over $13.6 Bn in 2025, against $8.7 Bn in 2024. Name the tracker when you quote either.
Who are the LPs in Indian VC funds?
Indian VC funds raise from domestic LPs such as family offices, wealthy individuals, corporates and banks, from the government through SIDBI's Fund of Funds for Startups, and from foreign LPs such as endowments and pension funds. IVCA says domestic LPs now supply 52.7% of capital in Category I and II AIFs.
What does the Fund of Funds for Startups invest in?
It invests only in SEBI-registered AIFs, never directly in startups. A June 2026 PIB backgrounder says its Rs 10,000 crore corpus is committed to over 145 AIFs, which have invested more than Rs 25,500 crore in over 1,370 startups. A second Rs 10,000 crore fund was approved in February 2026.
Are foreign LPs leaving Indian venture capital?
Not leaving, but their share is shrinking. No tracker publishes a clean 2025 split, yet IVCA puts domestic LPs at 52.7% of Category I and II capital, and Inc42's survey of over 70 investors found about 74% plan to raise from domestic LPs in their next fund.
Sources: Bain & Company, India Venture Capital Report 2026, 1 Apr 2026 · Inc42, Of Dry Powder And Wet Blankets: How India's VC Hit Reset In 2025, 26 Dec 2025 · Entrackr, IVCA Forum 2025 highlights push to deepen India's homegrown capital ecosystem, 3 Dec 2025 · Inc42, What's Driving Startup Investors' Shift Towards Domestic LPs?, 9 Apr 2026 · Inc42, Inside Q1 2026's Mega Deal Drought, 8 Apr 2026 · PIB, Empowered Youth, Stronger Nation (backgrounder), 13 Jun 2026 · TechCrunch, India doubles down on state-backed venture capital, 14 Feb 2026 · TechCrunch, India startup funding hits $11B in 2025 as investors grow more selective, 27 Dec 2025 · SEBI, Data on Alternative Investment Funds, quarter ended 30 Jun 2026
For more on how startup funding works in India, read the MyStartupValley blog or visit mystartupvalley.com.