India’s venture debt market has witnessed remarkable growth, reaching $1.23 billion in 2024, a significant rise from its nominal presence six years ago. This surge, growing at a 58% compound annual growth rate (CAGR) since 2018, reflects the increasing confidence in the country’s startup ecosystem. The number of venture debt deals soared to a record 238 in 2024, up from just 56 in 2018, highlighting its expanding role in startup financing.
The Global Venture Debt Landscape
Globally, the venture debt market has been growing at a 14% CAGR, transitioning from a niche financial instrument to a mainstream asset class. The value of venture debt deals rose from $37.9 billion in 2018 to $83.4 billion in 2024. Markets such as the United States and Europe have led this trend, with venture debt accounting for 20-30% of total venture capital funding.
In India, limited partners (LPs) are increasingly recognizing venture debt as a critical component of balanced capital allocation, with 54% of LPs supporting its role. Venture capitalists (VCs) are also endorsing debt financing as a complement to equity funding, allowing startups greater financial flexibility and sustainability.
Sectoral Trends and Growth Drivers
The fintech, consumer tech, and cleantech sectors have emerged as key beneficiaries of venture debt in India. According to the latest Global Venture Debt Report 2025, the breakdown of venture debt funding in 2024 was as follows:
– Fintech: $447 million (49 deals)
– Consumer tech: $295 million (81 deals)
– Cleantech: $202 million (22 deals)
Startups are leveraging venture debt for multiple purposes, with the top use cases being working capital (52%), growth financing (44%), and runway extension (43%). The rising adoption of venture debt underscores its increasing role in providing non-dilutive financing options to high-growth startups.
Geographical Distribution of Venture Debt in India
The venture debt market is expanding across major Indian metropolitan cities, with Bengaluru leading the charge. The city accounted for $485.5 million in venture debt funding across 80 deals. Other major hubs include:
– Mumbai: $244.6 million (42 deals)
– Delhi-NCR: $242.5 million (69 deals)
These cities have become focal points for venture debt investment, reflecting the increasing reliance of startups on this alternative financing mechanism.
Market Outlook and Future Trends
India’s venture capital market also saw a resurgence in 2024, recording a 20% year-on-year (Y-o-Y) increase to reach $12 billion. While venture debt growth remained relatively flat on a Y-o-Y basis at 2.5%, its increasing adoption suggests long-term growth potential. Exit trends further affirm the sector’s maturity, with venture-backed startups securing an average equity funding of $81.2 million in 2024 and public market sales driving 55% of exits.
As the venture debt market continues to mature, its role in startup financing is set to strengthen, providing founders with an alternative funding route that ensures both flexibility and sustainability. Stride Ventures Founder & Managing Partner Ishpreet Singh Gandhi highlighted, “Venture debt has evolved from being a niche instrument to a mainstream asset class, empowering entrepreneurs to grow sustainably. We aim to offer a strategic lens on its evolving role and adoption across both emerging and developed ecosystems.”
Doonited Affiliated: Syndicate News Hunt
This report has been published as part of an auto-generated syndicated wire feed. Except for the headline, the content has not been modified or edited by Doonited
