Year in review: Late-stage deals hushed by loud IPO buzz

India’s late-stage startup funding slipped in 2025 compared to last year as a busy IPO calendar squeezed private market transactions for companies. Total capital flowing via private rounds from Series C to Series F and beyond, fell to $3.5 billion as of December 1 this year from $4.03 billion in 2024, after reaching $3.4 billion the year before, according to data from Venture Intelligence.

The decline in late-stage funding comes at a time when several new-age, venture-backed companies including Lenskart, Groww, PhysicsWallah and Ather Energy made their stock market debuts, making 2025 one of the most active IPO years for the Indian startup ecosystem since the 2021-22 boom. Then, Zomato, Nykaa and Paytm debuted on the stock market.

This shift towards public markets, industry executives said, redirected liquidity that would otherwise have been routed through large private transactions. About half a dozen tech companies that have listed this year collectively unlocked more than Rs 15,000 crore ($1.6 billion) via the OFS (offer for sale) route for their shareholders.


Aside from that, they are sitting on over $8 billion in mark-to-market value on the shares they continue to hold.

Gopal Jain, managing partner at Gaja Capital, said the trend is a result of the robust IPO market. He noted that late-stage funding typically comprises two types of deals — those that involve significant primary capital infusion or a secondary share sale by existing shareholders that allow early backers to exit. “Due to so many companies tapping the public markets, investors have chosen to seek liquidity in IPO markets, rather than in private markets,” Jain said.

Quick commerce startup Zepto ($450 million) and ride-hailing platform Rapido ($270 million) are among the companies that closed a funding round this year in a mix of primary and secondary. Similarly, ecommerce firm Meesho and wealthtech Groww closed funding of $270 million and $200 million respectively, but these were pre-IPO rounds.

Need for growth capital reduces

Although funding amounts declined, late-stage activity saw an uptick with 85 deals this year, up from 71 a year ago.

The dip in late-stage funding has also been attributed to a shrinking supply of capital at this stage, according to Navin Honagudi, founder and managing partner of Elev8 Venture Partners, which backed startups like Smallcase and Astrotalk.Funding for later-stage rounds has been in decline since the 2021–22 funding peak, partly because large investors such as Tiger Global, SoftBank, and Prosus, along with multiple hedge funds, have scaled back participation.

Honagudi added that startups are also becoming profitable faster, with many aiming for early IPOs, which reduces the need to raise additional private capital in later rounds to bolster their financials before going public. Companies have become more prudent in their spending, and founders are increasingly cautious about diluting their stake at later stages, industry executives noted.

Sumer Juneja, managing partner and head of EMEA & India at SoftBank Investment Advisers, said in an interview in November that the Japanese group was seeing improved deal flow.

“It’s been about three years since a new India investment, but we’re seeing a much better pipeline than 18 months ago. The AI opportunity is exciting…but we’re careful. You can always get carried away by hype…we’d rather get it right,” Juneja said.

Rahul Chowdhri, partner at early-stage investment firm Stellaris Venture Partners, said that with the usage of AI, companies are using cash more efficiently and delivering stronger outcomes with the same level of capital. At the same time, late-stage investors have become more discerning, a shift he described as healthy for the ecosystem.“Late-stage investors are more discerning, which is good. Even companies are raising the right amount of capital because founders are sensitive to dilution,” Chowdhri added.