India’s venture capital assets under management (AUM) are expected to reach 4.9 lakh crore rupees (US$58.8 billion) by 2025, nearly five times higher than a decade ago, according to a new report from Fibonacci X, a venture platform based in India.

The report attributes this growth to the rise of small domestic funds and an increase in local limited partners (LPs).

Funds with AUM below 400 crore rupees (US$48 million) are driving much of the new capital, with an average of 10 new funds over 300 crore rupees (US$36 million) launched each year for the past three years.

Returns remain concentrated, as only 48 out of 169 reviewed schemes delivered at least 50% back to investors, and top-quartile funds recorded a distributed-to-paid-in (DPI) ratio of 3x, compared to an industry average of 0.4x.

The share of domestic LPs in new funds rose to 39% in 2025, up from 20% in 2023.

🔗 Source: Fibonacci X

🧠 Food for thought

1️⃣ India’s VC surge defies broader emerging market downturn

While most emerging markets experienced significant venture capital contractions in 2024, India bucked this trend with remarkable growth.

VC investments across emerging markets globally fell by over 40% in 2024, with regions like Southeast Asia and Africa seeing declines of 45% and 44% respectively2.

However, India’s VC funding surged to $13.7 billion in 2024, marking a 40% year-over-year increase and positioning the country as the second-largest VC destination in Asia-Pacific34.

This divergence demonstrates India’s unique resilience in attracting venture capital despite global headwinds, including rising interest rates and economic uncertainties.

The performance stands out even more when compared to the broader global VC landscape, where funding dropped from historic highs of $643-671 billion in 2021 to approximately $214 billion in 20235.

2️⃣ Five-decade evolution from government initiative to domestic capital dominance

The current dominance of domestic capital represents a complete transformation from India’s VC origins as a government-led initiative in the 1970s.

India’s venture capital history began with the R.S. Bhatt committee in the early 1970s, followed by formal government institutionalization in 1988 with restrictive guidelines that marked the industry’s humble beginnings6.