India's venture debt market has witnessed impressive growth, growing at 58% compound annual growth rate (CAGR) from 2018 to 2024 to $1.23 billion during the last year, as per a report by Stride Ventures and Kearney published on Wednesday.
The Global Venture Debt Report 2025 puts the spotlight on the immense development of the market, and it points out that venture debt (VD) in India was at a value of only $80 million back in 2018. Bengaluru was the frontrunner, with 40% of all venture debt transactions, followed by Delhi NCR and then Mumbai.
"Whereas India's venture debt market grew from a niche presence of six years ago to $1.23 billion in 2024, this report takes a bigger view to cover world trends. Globally, venture debt is expanding at 14% CAGR, evolving from a niche product to a mainstream asset class that allows entrepreneurs to grow their businesses in a sustainable way," said Ishpreet Singh Gandhi, Founder and Managing Partner, Stride Ventures.
The report further enlightens how startup founders view venture debt. Based on survey results, 61% of founders named VD as one of the principal tools for working capital management and runway extension and enabling startups to fill financial gaps between equity rounds of funding without diluting ownership.
In addition, 41% of those surveyed pointed out the increasing use of venture debt for pre-IPO bridge financing to enable companies to build up their operations prior to an IPO. At the same time, 37% of entrepreneurs noted its importance for financing inventory and capital expenditure (CAPEX), especially for asset-backed companies that need flexible financing options.
"Our data shows an increase in demand for growth-stage startup venture debt, especially in fintech, cleantech, and consumer tech. With equity financing being more selective, venture debt is becoming increasingly important in plugging funding gaps and enabling founders to retain strategic control," said Apoorva Sharma, Managing Partner at Stride Ventures.
The fintech industry had the most significant portion of venture debt value in 2024 at 37%, followed by consumer businesses at 25% and cleantech at 18%. Although the consumer sector had the most deals at 81, fintech surpassed them by value, collecting $447 million of venture debt.
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