A research by Stride Ventures states that the country’s venture-debt market exceeded the $1 bn threshold last year, with $1.2 bn, thanks to the increased confidence of investors, venture capitalists, and founders. The milestone, which represents a 50% increase over the prior year, was attributed to 175–190 deals and represented a roughly 34% compound annual growth rate (CAGR) between 2017 and 2023.
This breakthrough indicates a move toward strategic funding, bringing Indian innovation to a worldwide audience, according to Ishpreet Singh Gandhi, managing partner at Stride Ventures. Gandhi continued, estimating that the market will reach $1.8–2 bn by 2026.
The survey stated that the rise indicates the maturity of the market and the rising sophistication of venture-debt solutions customized to the needs of companies, with a growing desire for one-stop debt solutions that streamline fundraising and financial packages for startups.
Startups that do not yet have a track record of revenue generation frequently turn to venture debt financing. In contrast to conventional debt funding, venture capital is typically offered by specialized lenders who are prepared to assume greater risk in exchange for possibly larger profits.
The India Tech Unicorn & Exits Report 2023 states that the country’s startup ecosystem, which ranks third in the world for the quantity of these businesses, attracted $8.2 bn in venture capital investments in 2023, or roughly 3% of the world’s venture capital market. Comparing this to the $25.9 bn raised in 2022, there was a 68% drop. Seed-stage startups witnessed a 57% decline in investment, while early-stage startups saw a 68% loss. Startups in their later stages suffered the most, with investment declining by 70% from 2022 to 2023.