India’s venture debt market has experienced substantial growth, surging from $80 million in 2018 to $1.23 billion in 2024, representing a compound annual growth rate (CAGR) of 58 per cent, according to a report by Stride Ventures and Kearney.
The Global Venture Debt Report 2025, released on Wednesday, highlights the increasing role of venture debt in supporting Indian startups by providing crucial funding without requiring founders to dilute their equity.
Bengaluru has led the growth of venture debt in the country, accounting for 40 per cent of total venture debt deals, followed by Delhi NCR and Mumbai.
As the demand for alternative funding options rises, startups across fintech, consumer technology, and cleantech sectors have turned to venture debt for financial flexibility.
“As India’s venture debt market grows from being nominal six years ago to $1.23 billion in 2024, this report expands its focus to global markets. Venture debt across the world is growing at a 14 per cent CAGR, advancing from being a niche instrument to a mainstream asset class, empowering entrepreneurs to grow sustainably,” said Ishpreet Singh Gandhi, Founder and Managing Partner of Stride Ventures.
The report also provides insights into how startup founders perceive venture debt as a financing tool. A significant 61 per cent of founders surveyed identified venture debt as a preferred instrument for runway extension and working capital management.
It allows startups to navigate the period between equity funding rounds without sacrificing ownership.
Additionally, 41 per cent of respondents cited venture debt’s increasing role in pre-IPO bridge financing, enabling companies to scale operations and stabilise their business ahead of public listings.
Another 37 per cent of founders highlighted its importance in inventory and capital expenditure (CAPEX) financing, particularly for asset-heavy businesses that require flexible and tailored financial solutions.
“Our data reveals a clear uptick in demand from growth-stage companies, especially in sectors like fintech, cleantech, and consumer tech. As equity capital becomes more selective, venture debt is playing a pivotal role in bridging funding gaps while empowering founders to retain strategic control,” said Apoorva Sharma, Managing Partner at Stride Ventures.
The fintech sector emerged as the leader in venture debt deals, accounting for 37 per cent of total deal value, followed by the consumer sector with 25 per cent and cleantech with 18 per cent in 2024.
Although the consumer sector recorded the highest number of deals, with 81 transactions, fintech led in terms of total deal value, raising $447 million in venture debt.
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