India’s venture capital (VC) landscape witnessed a significant rebound in the April–June quarter of 2025, attracting $3.5 billion in funding across 355 deals, according to KPMG’s latest Venture Pulse Q2 2025 report. This marks a notable rise from the $2.8 billion raised across 456 deals in Q1 2025, reflecting renewed investor confidence despite global headwinds.
Fintech, Health-tech, and Logistics Attract Strong Interest
Key sectors such as fintech, health-tech, and logistics remained at the forefront of investor interest. The resurgence in funding activity underlines India’s growing stature as a global startup and innovation hub.
“India’s venture capital landscape demonstrated resilience in Q2 2025, with funding rising despite global uncertainties. Key sectors like fintech, health-tech, and logistics drew strong investor interest, reflecting confidence in India’s innovation potential,” said Nitish Poddar, Partner and National Leader, Private Equity at KPMG in India.
The Q2 2025 performance underscores the country’s evolving role in shaping the startup ecosystem across the Asia-Pacific region.
Global VC Trends: AI and Defence-Tech Dominate
Globally, venture capital investments dipped to $101.05 billion in Q2 2025 from $128.4 billion in the previous quarter. Despite this decline, KPMG noted that Q2 was still a relatively strong period for VC funding amid geopolitical tensions, trade disruptions, and macroeconomic uncertainty.
The report also emphasized that investor focus is increasingly shifting towards larger, high-impact opportunities, especially in artificial intelligence (AI) and defence-tech.
The United States retained its lead in global VC funding, attracting nearly 70% of all VC investment in Q2 2025. Several of the world’s top five largest deals were in AI, defence-tech, and space-tech, further reinforcing the trend.
Europe Remains Resilient, Asia Struggles
In Europe, VC investment remained stable at $14.6 billion, only slightly down from $16.3 billion in the previous quarter. However, the number of deals dropped significantly from 2,358 to 1,733, as investors focused on larger and late-stage funding rounds.
On the other hand, Asia’s VC ecosystem continues to face challenges, with investment volumes remaining low. Although funding rose marginally from $12.6 billion to $12.8 billion in Q2 2025, deal count dropped significantly from 2,663 to 2,022, making it the second-lowest quarterly performance for the region in over a decade.
India Holds Strong Amid Global Fluctuations
India’s growth in VC funding during Q2 stands in contrast to global trends and highlights the country’s increasing appeal to both domestic and international investors. The growth is being driven by innovation-led sectors, government support for startups, and scalable digital business models.
With fintech continuing to draw significant capital and new-age sectors like AI and defence-tech gaining traction, India’s venture ecosystem is poised for further expansion in the coming quarters.