Synopsis
Venture debt in India reached $1.3 billion in 2025. Deal numbers decreased, indicating slower startup funding. Venture capital investments remained stable. Venture debt's share in startup funding grew significantly. This trend mirrors mature global markets. Fintech dominated venture debt, followed by consumer and cleantech sectors. Growth credit also saw substantial deployment.The number of transactions declined to 187 in 2025 from 238 a year earlier, pointing to a moderation in startup funding. Venture capital investments remained largely flat during the year, as a drop in large-ticket deals and a shifting investment thesis towards early-stage artificial intelligence (AI) startups weighed on aggregate funding levels, ET had reported in December.
Despite the near-term slowdown, the share of venture debt has steadily increased within the startup funding mix. Over the past five to six years, debt as a proportion of annual venture capital deployment has risen to around 9% from 2-3% earlier, underscoring its growing relevance as an alternative financing avenue, the report noted.
“The convergence of venture debt maturity, surge in founder demand, and emergence of growth credit indicates Indian high-growth companies will increasingly employ an integrated capital stack,” the report said. This would typically involve early-stage equity and venture debt at the series A and B stages, followed by growth or private equity and growth credit at later stages, such as series D and beyond.
Such a two-layered credit structure mirrors more evolved venture ecosystems in the US, Europe, and Asia-Pacific, suggesting that India’s startup financing landscape is entering a more mature phase. Stride Ventures has backed companies such as Ather Energy, Udaan, Sugar Cosmetics, and Zepto.
Sectorally, fintech accounted for nearly half of total venture debt deployment of about $600 million during the year. The consumer segment followed with $188 million, while cleantech startups attracted $108 million, and the energy space $100 million.
The report noted that while fintech continues to dominate with 46% of total capital deployed, consumer platforms accounted for 32% of the deal volume despite a relatively smaller share of the overall value. This, Stride Ventures said, indicated that venture debt is increasingly being used for tactical purposes such as working capital and growth financing in consumer-facing businesses, rather than only for large capital raises.
At the same time, the emergence of venture debt activity in sectors such as cleantech, energy, and agritech signals that lenders are tracking India’s broader innovation landscape, particularly as capital-intensive sectors begin to scale, it added.
Separately, growth credit — a form of private debt extended to more mature companies with stronger revenue visibility and typically involving larger cheques — saw deployments of $1.68 billion during the year, according to the report.
Apart from Stride Ventures, among the other players in India’s venture debt market are Trifecta Capital, Alteria Capital, InnoVen Capital, EvolutionX Debt Capital, and BlackSoil.
In 2025, Stride Ventures raised $300 million across funds focussed on India, the Gulf Cooperation Council (GCC), and the UK, and is looking to raise an additional $300 million across strategies.
