India’s private equity and venture capital market closed 2025 at its second-highest annual investment level on record, outperforming 2024 and defying a period that many observers had characterised as a structural funding correction. The headline figures, drawn from the EY-IVCA India Trendbook 2026 — released in early March — indicate an ecosystem that is not recovering from a winter so much as continuing through a multi-year transition toward more selective, disciplined, and institutionally anchored capital deployment.
The 2025 Full-Year Picture: India
According to the EY-IVCA India Trendbook 2026, PE/VC investments in India reached $60.7 billion across 1,475 deals in 2025 — an 8 per cent year-on-year increase in deal value and a 9 per cent rise in deal volume, marking the second-highest annual investment value recorded in India’s PE/VC market. The report noted that investment momentum was driven by a rebound in growth and credit investments, while overall transaction volumes reached a record high during the year.
The framing of this number matters for accuracy. The research brief supplied for this article described 2026 as the moment “funding winter is over,” implying that 2025 represented distress. The EY-IVCA data contradicts this characterisation: 2025 was, by investment value, a strong year — the second-strongest in India’s PE/VC history after 2022.
The nuance lies in composition. Pure-play PE/VC investments in H1 2025 — excluding real estate and infrastructure — reached $18.3 billion, broadly in line with H1 2024. The real estate and infrastructure asset class declined sharply in the first half, falling 40 per cent year-on-year, which suppressed the headline comparison. Pure-play venture and private equity activity, however, showed resilience throughout the year.
Fundraising activity surged to a record $23.2 billion during 2025, against $9.8 billion raised in 2024 — a 137 per cent increase — with the number of fund closes rising 35 per cent to 123, also the highest annual count on record. This fundraising momentum is the structural indicator that matters most for 2026 deployment: capital raised in 2025 will be deployed over the next two to four years, providing the pipeline for continued deal activity regardless of near-term macro conditions.
EY India’s Partner and National Leader for Private Equity Services, Vivek Soni, said at the Trendbook launch: “In the near term, it is a wait-and-watch environment as investors assess market stability and earnings visibility. But the medium- to long-term outlook remains unequivocally positive, supported by India’s strong structural fundamentals and sustained global investor interest in India’s growth story.”
Global Context: $512 Billion in 2025, January 2026 Opens at $55 Billion
The Indian data sits within a global venture capital market that posted its second-highest annual total on record in 2025.
The global venture capital market saw $512 billion in deal value in 2025, nearly matching 2022’s all-time high, according to PitchBook-NVCA Venture Monitor data. AI accounted for more than half of total deal value in 2025 and nearly one-third of all completed venture deals worldwide. Rounds into late-stage companies led in terms of deployed capital, while early-stage investment showed signs of stabilisation. Global VC exit value climbed to $549.2 billion in 2025, up more than $200 billion over 2024.
Capital concentration intensified in 2025 at a level that has no recent precedent. Close to 60 per cent of invested capital went to 629 companies that raised rounds of $100 million or more. More than a third of global funding — 34 per cent — went to 68 companies that raised rounds of $500 million or above, compared to 24 per cent of funding being captured by this tier in 2024. The 10 most highly valued private companies globally all raised new funding in 2025 at significantly higher valuations.
January 2026 carried this momentum forward. Global venture funding reached $55 billion in January 2026, according to Crunchbase data — more than doubling the $25.5 billion recorded in January 2025 and rising over 50 per cent from December 2025. The increase was heavily concentrated in large rounds.
The research brief cited a figure of $47.5 billion for January 2026 global funding. The Crunchbase primary source shows $55 billion for the same month. The higher figure is used here as it is drawn from Crunchbase’s own published data.
The AI Concentration: Capital Goes Where Models Are
The defining structural feature of global venture in 2025 — and the trend most likely to shape 2026 — is the concentration of capital in artificial intelligence companies.
PitchBook data through Q3 2025 shows AI startups captured 65 per cent of the year’s total US VC deal value, with more than half of new unicorns built on AI foundations. Multistage firms and corporate investors were driving this momentum, deploying record levels of capital into AI-driven opportunities. ( According to a report by:Press Information Bureau )
The three largest individual venture rounds globally in Q3 2025 were all AI-related: a $13 billion raise by Anthropic, a $10 billion round by xAI, and a $1.5 billion raise by Genesys. These transactions illustrate the appetite for large directional bets on artificial intelligence infrastructure and foundation model development.
In India, the AI capital concentration is playing out through both international mega-rounds — Blackstone’s $600 million equity investment in compute infrastructure startup Neysa being the most prominent — and through government-backed deployment under the IndiaAI Mission, which has allocated over ₹10,372 crore for compute access, foundation model development, and skilling initiatives.
India’s Sector Breakdown: What Capital Is Chasing
Within India’s PE/VC market, the technology sector has dominated buyout deal value since 2020, accounting for $20.1 billion across 35 buyout deals. Financial services follows with $6.9 billion in buyouts, and pharmaceuticals third at $4.7 billion. Together, these three sectors account for 67 per cent of overall buyout value since 2020 — a concentration that reflects where institutional capital sees the most durable earnings and exit potential.
The fintech category, which defined much of India’s startup capital concentration between 2019 and 2022, is maturing. Global fintech funding reached $51.8 billion in 2025, a 27 per cent increase from 2024 — the highest level in several quarters — but deal flow declined 23 per cent year-on-year to 3,457 transactions, confirming the pattern of fewer but larger rounds. Investors described 2021-22 as outlier years driven by “the COVID-19 rebound and ultra-low interest rates,” and said the current environment reflects a more selective appetite for fintech models that have demonstrated sustainable revenue without continuous capital injection.
The Exit Environment: IPOs and M&A Both Rising
The exit channel — the mechanism through which investors recover capital — has opened meaningfully. Global M&A in 2025 was the second-highest year on record, and the US M&A market reached its highest level ever, including a notch above 2021. The IPO market also opened in 2025, though deal flow remained selective rather than broad-based.
In India, the pattern is consistent with the global trend. PE/VC exits through IPO have grown strongly, supported by buoyant domestic capital markets, higher valuation multiples in mid- and small-cap companies, and strong investor demand for high-growth businesses. Exits through IPO accounted for 46 per cent of total PE/VC exit value in November 2025.
The Cautious Optimism That Frames 2026
The EY-IVCA Trendbook’s assessment of 2026 is measured rather than bullish. The report notes that investors may adopt a cautious approach in 2026 amid policy uncertainties, volatile equity markets, and geopolitical developments affecting global energy prices. Fundraising at record levels provides dry powder; deployment will depend on earnings visibility, valuation discipline, and exit market conditions.
Crunchbase’s 2026 forecast, drawn from four leading venture investors, projects global VC deployment to increase from the low $400 billion range — where 2025 closed — to the high $400 billion mark, implying approximately a 10 per cent increase in dollars deployed. Analysts consistently expect this increase to be concentrated in AI and AI-adjacent categories, with traditional SaaS and non-AI fintech facing tighter access to capital.
The Indian data through January 2026 does not yet show a significant inflection point distinct from the strong 2025 trajectory. What it shows is an ecosystem where capital is abundant at the top of the market, selective at the middle stages, and increasingly demanding at the early stage — a configuration that rewards execution quality and punishes narrative-led funding pitches. Whether the strong momentum from late 2025 carries through H1 2026 will depend on how India’s corporate earnings season lands, how global trade tensions evolve, and whether the IPO pipeline continues to deliver exits that recycle capital back into new investments.