Family Offices and First-Time Managers Fuel New VC Landscape: Report Family offices are emerging as influential backers, with 71% investing directly in startups and nearly half writing cheques of less than INR 10 crore.
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India's venture capital industry has undergone a dramatic transformation over the past decade, with assets under management (AUM) rising nearly fivefold to INR 4.9 lakh crore.
A new report by venture platform Fibonacci X, VC Perspectives – India 2025, highlights how domestic capital and first-time managers are rewriting the country's startup funding playbook.
The report shows that funds below INR 400 crore are driving fresh inflows, while the most successful funds have delivered returns far outpacing industry averages. "Fund sizes below INR 400 crore have been the real workhorses of the VC industry. An average of 10 new funds of over INR 300 crore each have launched annually in the past three years, steadily adding to India's dry powder," said Preksha Razdan, Investment Analyst at Fibonacci X.
Dry powder (the capital waiting to be deployed) has grown from INR 100 crore in 2015 to INR 5,000 crore by March 2025, reflecting a massive appetite for early-stage opportunities.
However, the report indicates that returns are still highly concentrated. Out of 169 schemes reviewed, only 48 returned at least 50% of capital to their investors. The top quartile of funds recorded a distributed-to-paid-in ratio of 3x, compared to an industry average of 0.4x. "This confirms the power-law dynamic of venture capital. The top funds create meaningful outcomes while the majority deliver modest returns, reinforcing the need for sharper fund selection," Razdan added.
One of the most notable structural shifts has been the rise of domestic LPs. By 2025, 39% of new funds had a fully domestic investor base, up from 20% just two years earlier. Family offices are emerging as influential backers, with 71% investing directly in startups and nearly half writing cheques of less than INR 10 crore.
"The rise of domestic LPs tightens due diligence and makes fundraising more demanding, but it also roots venture capital in India's own investor ecosystem. This evolution is crucial to building a resilient, locally aligned startup economy," said Kulmani Rana, Founder and CEO of Fibonacci X.
The report further observes that several leading Indian VC firms were built by first-time managers without global playbooks, with some recording AUM growth of up to 48 times in a decade. In terms of resilience, SaaS ventures have shown greater durability compared to sectors such as edtech and marketplaces.
