Indian Venture Ecosystem Poised for Global Ascent: Recovery, IPO Resurgence, and 'Building for Bharat' to Define 2025 India's GDP is poised to scale from USD 4 trillion to USD 8 trillion over the next decade and will offer a playground that is remarkable for both founders and venture capital (VC) firms, said Pranav Pai, Founding Partner and CIO at 3one4 Capital.
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India's GDP is poised to scale from USD 4 trillion to USD 8 trillion over the next decade and will offer a playground that is remarkable for both founders and venture capital (VC) firms, said Pranav Pai, Founding Partner and CIO at 3one4 Capital.
"2025 should be a recovery year that sees India build upon its momentum and assert itself more globally. As 2024 draws to a close, founders and investors are leaving behind the last stages of the global venture correction and the 'funding winter," said Pai.
The ecosystem is experiencing a renewed surge in founder confidence and entrepreneurial momentum in the country, according to Pai, and is supported by a stable government at the center which has a pro-growth government, along with positive tailwinds from the global markets notably post the USA elections.
Looking ahead to 2025, Pai said that the ecosystem can expect the private markets in India to make a "strong comeback" as the dominant Western markets regain footing and IPOs from tech companies re-emerge.
"The success of venture-backed IPOs in India has shown founders a clear path to public-market validation. These dual tailwinds—improved global sentiment and proven domestic listing outcomes—will help Indian tech companies accelerate growth and establish sustainable long-term trajectories. We anticipate mid and growth-stage investment rounds to pick up meaningfully, renewing value expansion in the private markets," said Pai.
Three key trends on the sectoral front, according to Pai are poised to take off the first being export-oriented enterprises benefitting from the reorientation of global trade flows and will find new market opportunities more efficiently. Secondly, investments in 'frontier-technologies' will gain more traction as the country increases spending in areas such as defense, industrial automation, digitalization, and energy transition.
"Gen-Z consumer aspirations and premiumization will unleash new opportunities in traditional consumption categories," said Pai.
Pankaj Makkar, Managing Director at Bertelsmann India Investments believes that 2024 saw the market get divided into two key segments mature companies and early-stage startups. For companies that have achieved scale, the focus remained on achieving profitability and raising money from the public markets through initial public offerings (IPOs).
"This theme dominated this year and will continue well into next year. Companies that missed these milestones experienced significant value reductions, which we see as a necessary market correction—bringing some much-needed sanity to the space. Meanwhile, on the early-stage side, the focus remained on finding products serving niche markets and with strong founding teams capable of delivering value to targeted consumers," said Makkar.
According to Makkar, capital was available for the teams, and ideas with the competition in early-stage investments heating up, in the last few months of 2024 showed signs of increased activity.
"The innovation will be driven by understanding and addressing these local realities—providing affordable access to technology or interfaces for diverse languages and literacy levels, or offering solutions that work in semi-urban and rural contexts," said Makkar adding that as a VC firm, it wishes to see the theme of 'India to the world', wherein the country is equipped to build products, solutions, and companies that solves for global problems.
"We would like to see more Indian enterprises developing products that can serve not just the domestic market, but also scale internationally," said Makkar.
Makkar added that one of the big themes for the next year will be 'Building for Bharat' with a focus on innovation that will bring the next 500 million users into the fold.
