India's VC funding hits $3.5 bn led by fintech amid global slowdown: KPMG

Global venture capital (VC) investment declined to $101.05 billion across 7,356 deals in the second quarter of 2025, compared to Q1's $128.4 billion: KPMG's latest Venture Pulse report

Venture capital (VC) investment in India rose to $3.5 billion across 355 deals in the second quarter of 2025 (April-June), marking an increase from $2.8 billion across 456 deals in the previous quarter, according to the latest Venture Pulse report by KPMG Private Enterprise. The growth comes amid a global slowdown in VC activity.

 

“India’s venture capital landscape demonstrated resilience in Q2’25, with funding rising despite global uncertainties,” said Nitish Poddar, partner and national leader – private equity, KPMG in India. “Key sectors like fintech, healthtech, and logistics drew strong investor interest, reflecting confidence in India’s innovation potential.”

 

Fintech leads Q2 funding in India

India’s fintech sector continued to dominate domestic VC flows in Q2. Notable deals included funding rounds for Groww at $200 million and IKF Finance at $172 million.

 

The recent success of fintech IPOs in the US—such as Circle, Chime, and eToro— is boosting investor confidence globally. The report suggests that Indian fintech startups, especially mature ones, might soon also find opportunities to go public or get acquired, making this a promising time for the sector, despite global economic uncertainty.

 

Healthcare, Logistics gains in Q2

Beyond fintech, healthtech and logistics startups saw increased traction among Indian VC investors. Long-term macro trends such as digital health adoption, supply chain innovation, and growing interest in AI-powered vertical solutions drove interest in these sectors.

 

Asia VC landscape sees subdued growth

India’s performance stands in contrast to the broader Asian VC landscape, where total investment was $12.8 billion in Q2, a marginal increase from $12.6 billion in Q1. The region also experienced a significant decline in deal volume to 2,022 from 2,663, marking one of its weakest quarters in over a decade.

 

Corporate VC activity across Asia also hit historic lows, reaching just $6 billion in Q2. “The quarter’s performance underscores India’s growing role in shaping the region’s startup ecosystem,” said Poddar.

 

Global VC funding drops in Q2

Global venture capital investment totalled $101.05 billion across 7,356 deals, down from Q1’s $128.4 billion. However, sectors such as AI, defencetech, and fintech saw gains despite intensifying geopolitical and economic headwinds.

The drop in global funding is largely attributed to the absence of an exceptional one-off transaction, such as OpenAI’s $40 billion raise in Q1. 

“Despite a challenging global environment... Q2’25 showed that venture capital investment remains resilient—particularly in sectors that are driving long-term technological transformation,” said Conor Moore, global head of private enterprise at KPMG International.

 

AI megadeals fuel growth in the Americas

The Americas led global investment, raising $72.7 billion across 3,425 deals. The US accounted for the majority, driven by blockbuster raises such as Scale AI’s $14.3 billion, Anduril’s $2.5 billion, and Thinking Machines Lab’s $2 billion.

 

Europe VC funding holds steady

European VC investment held relatively steady at $14.6 billion, despite a drop in deal count to 1,733 from 2,358. Investors pivoted towards larger, late-stage deals, particularly in the AI-defence-tech intersection. Noteworthy transactions included Germany’s Helsing ($683 million) and Portugal’s Tekever ($500 million).