Venture‑debt surge

India’s startup founders spent years treating debt like an emergency oxygen tank. In 2025, many of them started using it more like fuel. (government.economictimes.com) A report released by Stride Ventures on April 8, 2026 said India’s private-debt market reached about $3 billion in 2025, with venture debt at $1.3 billion and growth credit at $1.68 billion. That is a record level for these startup-focused lending categories. (government.economictimes.com) Venture debt is a loan for startups that already have equity investors, so founders can raise cash without giving away as much ownership. Growth credit is a larger loan product aimed at more mature companies that want capital for expansion, acquisitions, or balance-sheet support. (economictimes.indiatimes.com) That distinction matters because Indian startups are no longer borrowing only to survive a funding winter. The Stride report says private debt is moving beyond runway extension and is increasingly being used to fund expansion. (government.economictimes.com) The headline number hides a second shift: deal count fell even as dollars rose. Venture-debt transactions dropped to 187 in 2025 from 238 in 2024, while deployment still increased to $1.3 billion from $1.2 billion. (economictimes.indiatimes.com) That usually means lenders are writing bigger checks into a smaller set of companies. In plain terms, capital is concentrating around startups that already look more durable, more predictable, or closer to scale. (economictimes.indiatimes.com; government.economictimes.com) Fintech took a large share of the borrowing. Economic Times said fintech led venture-debt deployment in 2025, with consumer and cleantech also drawing meaningful interest. (economictimes.indiatimes.com) Fintech is a natural fit for this kind of lending because many of those companies generate repeat transaction revenue and need capital to keep lending, acquiring customers, or building distribution. Lenders like businesses with visible cash flows, and mature fintech models often look closer to that than earlier-stage software startups do. (economictimes.indiatimes.com; transunioncibil.com) The timing also lines up with a more selective equity market. Bain & Company said India’s venture capital and growth-equity market reached about $16 billion in 2025, but Economic Times noted that large-ticket deals were under pressure and investor interest was shifting toward early-stage artificial-intelligence startups. (bain.com; economictimes.indiatimes.com) When equity money gets pickier, debt becomes a way to avoid raising a full pricedown round or giving up more shares too early. A founder who needs money for inventory, working capital, or a short expansion plan may prefer a loan over selling another chunk of the company. (india.entrepreneur.com; economictimes.indiatimes.com) Stride’s earlier 2025 report showed how broad that use case had become: 52 percent of venture debt was being used for working capital, 44 percent for growth, 44 percent for runway extension, 41 percent for pre-initial-public-offering bridge needs, and 37 percent for inventory and capital expenditure. That mix looks less like emergency borrowing and more like planned corporate finance. (india.entrepreneur.com) There is also a deeper market story here. Fortune India reported that India’s venture-debt market grew at a compound annual growth rate of 58 percent between 2018 and 2024, reaching $1.23 billion in 2024, which helps explain why 2025’s $1.3 billion figure looks like continuation rather than a one-off spike. (fortuneindia.com) If this trend continues, Indian startups may end up looking a little more like mid-sized companies in mature markets, mixing equity and debt instead of relying almost entirely on venture capital. The 2025 numbers suggest that private debt in India is becoming a standard financing layer rather than a niche last resort. (government.economictimes.com; economictimes.indiatimes.com)