VC Funding Records a Slowdown, PE Shows Resilience Despite Lacking 2024-level Highs India's private capital markets have witnessed a shifting landscape in 2025, with both venture capital (VC) and private equity (PE) showing diverging momentum compared to the same period last year. Data from January to August 19, 2025, from Tracxn highlights both cautious deployment and sectoral rebalancing across the ecosystem.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
India's private capital markets have witnessed a shifting landscape in 2025, with both venture capital (VC) and private equity (PE) showing diverging momentum compared to the same period last year. Data from January to August 19, 2025, from Tracxn highlights both cautious deployment and sectoral rebalancing across the ecosystem.
Declining Rounds and Ticket Sizes
VC funding in India from Jan–Aug 2025 totaled significantly lower than the previous year, with peak funding coming in March, from USD 687 million across 84 rounds and USD 724.53 million across 51 rounds.
However, July and August marked a steep slowdown with only USD 73.64 million from across 22 rounds, a sharp decline from the same period in 2024.
Comparing data for the January-August 2024 period, VC fund flows were much stronger, led by June 2024 with USD 1.28 billion across 102 rounds of funding. April 2024 saw USD 821.26 million across 92 rounds. Comparatively, August 2024 figures of USD 441.68 million across 43 rounds dwarfs the latest August 2025 figures, indicating a cooling in early-stage and growth stage appetite in 2025, with investors becoming more selective on quality deals and valuation benchmarks.
PE Shows Resilience
In contrast, PE funding has shown resilience in 2025 but is lagging in the highs experienced in the previous year. Investments peaked in January 2025, at USD 656.20 million across 23 rounds. Subsequent months remained steady with most months ranging between USD 280-460 million, except for August, which recorded USD 50 million across 3 rounds.
Comparatively, in 2024, private equity saw a year filled with activity, especially in June when USD 1.09 billion worth of investments were recorded, and in April, investment numbers stood at USD 910.59 million across 13 rounds. August 2024 saw a robust USD 571.26 million across 24 rounds, contrasting with the sharp drop in August 2025.
The data suggests that PE firms remain active in strategic, large-scale deals but are currently exercising timing caution, particularly in the third quarter of 2025.
According to Tracxn's data, a key observation is that VC has experienced a sharper slowdown than PE. VC funding has seen a contraction in both deal volume and value in 2025, while PE, though with a lower Y-o-Y, has held relatively steady.
August 2025 data also reflects a broader pullback across both PE and VC, signalling a cautious investment climate, especially amidst global macroeconomic uncertainties. Both categories have shown fewer deal numbers compared to last year, indicating that the investors are prioritizing selective bets over broad-based deployment.
