India's VC Pulse Beats Steady Amid Global Volatility While investors are taking a more cautious approach to their investments overall, there's clearly strong conviction behind the megadeals we're seeing in areas like AI, defencetech, and fintech
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In a world grappling with trade tensions, delayed exits, and geopolitical storms, venture capitalists are far from retreating, they're simply being more intentional. According to the latest KPMG Venture Pulse Q2 2025 report,Global VC investment fell to USD 101.05 billion across 7,356 deals, down from USD 128.4 billion in Q1.Despite the slowdown, megadeals didn't disappear. In fact, AI, defencetech, and spacetech are seeing record traction.
"Despite a challenging global environment, marked by geopolitical tensions and significant trade-related uncertainties, 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 and Partner at KPMG in the US.
"While investors are taking a more cautious approach to their investments overall, there's clearly strong conviction behind the megadeals we're seeing in areas like AI, defencetech, and fintech. What we're seeing is a reallocation of capital, not a retreat."
India: fewer deals, stronger momentum
In contrast to broader Asia, which remained sluggish with USD 12.8 billion in VC investments (among the lowest in a decade), India defied the regional trend. VC funding rose to USD 3.5 billion across 355 deals in Q2 up from USD 2.8 billion across 456 deals in Q1. This reflects a strategic shift in investor mindset, instead of spreading bets wide, investors are backing stronger, more scalable companies in sectors where India has real innovation muscle.
"India's venture capital landscape demonstrated resilience in Q2'25, with funding rising despite global uncertainties," shared 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. The quarter's performance underscores the country's growing role in shaping the region's startup ecosystem."
Indeed, fintech continues to lead the charge, both globally and in India, followed by a new wave of investments in healthtech and logistics—sectors directly tied to infrastructure, access, and digital empowerment.
Exit and fundraising trends
While overall investment cooled, global exit value actually rose, hitting USD 111.1 billion, up from USD 88.9 billion in Q1. In the US alone, exits surged from USD 52.4 billion to USD 67.8 billion. Asia's exit value also jumped significantly, from USD 19.2 billion to USD 29.7 billion, showing signs of latent momentum.
On the flip side, fundraising remains weak, with only USD 48.8 billion raised globally by Q2, on track to fall below the 2024 low of USD 187.3 billion, the lowest in eight years.
In Asia, deal activity fell from 2,663 to 2,022 deals quarter-over-quarter. Corporate VC participation, a key fuel for late-stage growth, has also dropped to just USD 6 billion in Q2 and USD 12.2 billion year-to-date, a stark fall from USD 48 billion in 2024 and USD 45.2 billion in Q3 2021.
What to expect in Q3
The mood remains cautious. "Given the continued delay in exits across many sectors, rising geopolitical tensions, and ongoing uncertainties related to tariffs and global trade policies, investors are expected to tread carefully in Q3'25," the report notes.
However, one area that will likely continue to dominate investor attention is AI, especially as more governments introduce national-level AI funding programs to secure tech sovereignty and attract global talent.
For India, this could spell opportunity. With increasing digital penetration, a maturing SaaS and fintech backbone, and growing appetite for deeptech innovation.
