VC Investments in Q3 to Remain Subdued Due to Global Uncertainties: Report The report said that the changes proposed to the new US tax bill could also drive fresh concerns over the period of next 3-6 months, with investors and startups taking guard to evaluate potential implications and incorporate them into their operations and deal-making processes.
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Global venture capital (VC) investments are expected to remain relatively subdued heading into the third quarter of 2025 as investors continue to be cautious due to the uncertainties related to global tariff policies, according to a report by KPMG.
The report said that the changes proposed to the new US tax bill could also drive fresh concerns over the period of next 3-6 months, with investors and startups taking guard to evaluate potential implications and incorporate them into their operations and deal-making processes.
In Q2, however, India, alongside Japan and Singapore, experienced significant upticks in investment, with VC investment in India rising from USD 2.8 billion to USD 3.5 billion,
Nitish Poddar, Partner and India leader - Private Equity, KPMG in India, said that India's venture capital landscape demonstrated resilience in Q2'25, with funding rising despite global uncertainties.
"Key sectors like fintech, healthtech, and logistics drew strong investor interest, reflecting confidence in India's innovation potential. The quarter's performance underscores the country's growing role in shaping the region's startup ecosystem," said Poddar.
According to the report, VC investment in India saw a solid uptick with investments rising from USD 2.8 billion across 456 deals to USD 3.5 billion across 355 deals quarter-over-quarter. A USD 218 million seed round raised by PB Healthcare, a startup focused on developing a tech-enabled health delivery platform, was India's largest VC investment of the second quarter, followed by a USD 200 million raise by on-demand logistics company Porter and investment platform Grow. Fintech remained one of the hottest sectors of investment in India.
Artificial intelligence (AI) is expected to remain a very hot sector of VC investment, with an increasing range of vertical solutions attracting attention, according to KPMG. Sectors such as defencetech, healthtech, and fintech are well-positioned to see steady fund flow in the third quarter, while sectors more susceptible to evolving US tariff policies could see VC investors holding back until those policies are stabilised.
In the second quarter of 2025, fintech funding saw a resurgence, helped by a number of significant deals such as Groww at USD 200 million.
Globally, however, defencetech remained high on the radar of venture capital investors in the second quarter of 2025, considering intensifying geopolitical tensions and conflict between countries across the world.
According to the report, VC investment in Asia overall rose from USD 12.6 billion across 2,662 deals in the first quarter to $12.8 billion across 2,022 deals in Q2; despite the minor increase, the level of VC investment in Asia remained very subdued, the second lowest quarter of investment seen in over a decade.
