Innovation is at the core of Indian Start-ups

India’s venture debt market surged to $1.23 billion in 2024, this marks a significant CAGR of 58% since 2018, far outpacing the global average of 14%, and reflects growing confidence in India’s startup ecosystem.

The total number of venture debt deals also hit a record 238 in 2024, a sharp rise from just 56 in 2018. Despite a modest 2.5% year-on-year growth from $1.2 billion in 2023, the long-term trend remains strong, supported by a 20% rebound in venture capital activity, which reached $12 billion in the same year.

Venture debt—a form of private credit for high-growth startups—is becoming a mainstream financing tool. The report shows 39% of market participants expect continued robust growth, indicating that venture debt is moving from niche to a more established asset class in India.

Positive exit trends also boost confidence, with India’s venture exits rising 1.7x to $6.6 billion in 2023, largely from public market sales. Startups backed by venture debt also raised strong follow-on equity, averaging $81.2 million in 2024.

Sector-wise, fintech led in deal value with $447 million across 49 deals, while the consumer sector led in volume with 81 deals worth $295 million. Cleantech followed with $202 million across 22 deals.

Key use cases for venture debt include working capital (52%), growth financing (44%), and runway extension (43%). Regionally, Bengaluru topped the chart with $485.5 million in funding, followed by Mumbai and Delhi NCR.

Globally, the venture debt market grew to $83.4 billion in 2024, with mature markets like the US and Europe allocating 20–30% of venture funding to debt—suggesting strong growth potential for India ahead.