India's Venture Debt Market: Funding Trends and Geography

The venture debt market in India touched a value of about $1.3 billion with 187 deals in 2025, as against $1.23 billion in 2024. The average ticket size was around $3.5 million and there was a significant amount of deal volume from Series A and Series B companies.

Delhi-NCR was the top city in 2025 accounting for around $617 million in 64 deals. Bengaluru had the next highest number of transactions in terms of deals and value worth $333 million, Mumbai with 30 deals had $115 million.

Activity continued to be strong in the first half of 2026. The two were among the most active investors in the startup space with 61 and 48 deals respectively.

Recently, QpiAI secured about $5.19 million in Venture debt in October 2026 from InnoVen Capitals. The deal highlights the rise of companies with deep-tech and AI applications that require significant financing through debt.

As Ishpreet Singh Gandhi, Founder and Managing Partner of Stride Ventures, has said, "Venture debt has become one of the key growth enablers for Indian startups."

Is Venture Debt Available to Pre-Revenue Startups?

Venture debt is typically more readily available to startups with institutional capital raised or revenue generated. Lenders are likely to look for relationships with investors and a track record of investors continuing to invest in the business.

However, the qualifications will differ from provider to provider. Some lenders specialize in lending to pre-revenue companies, provided that they have strong institutional backing, a viable funding stream or a sound business plan. If a startup is not getting VC funding, it might have to look into other modes of financing, like revenue-based, bank loans or NBFC loans, incubator funding or government-backed credit facilities.

What Are the Eligibility Criteria, Interest Rates and Costs of Venture Debt in India?

Venture debt lenders look beyond a startup's pitch value and valuations. They will usually conduct a financial review of the company, review its financial relationships with investors, financial performance, and its capacity to repay the facility.

What Do Venture Debt Lenders Assess?

Key considerations generally include:

• Investor backing: The quality of existing institutional investors and their willingness to support future funding rounds.
• Revenue and growth: Historical revenue, customer acquisition, business expansion and growth consistency.
• Unit economics: Customer acquisition costs, margins, retention and the sustainability of the business model.
• Cash runway and burn: Available cash, monthly expenditure and the time required to reach the next funding milestone.
• Capitalisation table: Founder ownership, existing investor stakes, outstanding convertible instruments and ESOP commitments.
• Governance: Financial reporting, management quality, legal compliance and shareholder arrangements.

Founders should have a Pitch Deck, Current Capitalisation Table, Financial Statements, Management Accounts, 24-36 Month Financial Projections, Shareholder/Investor Agreements and Bank Statements. In addition, lenders can carry out financial, legal and commercial due diligence prior to entering into a term sheet with a borrower, or to converting the term sheet into a loan facility agreement.