Indian venture-backed startups raised over ₹44,000 crore ($5.3 billion) in FY25 through public market channels like initial public offerings (IPOs), follow-on public offerings (FPOs), and qualified institutional placements (QIPs), based on a new report published Monday.
The RainGauge Index FY25 Annual Report by Rainmaker Group pointed to a significant shift in the patterns of fundraising, with public markets becoming the primary source of late-stage capital, overtaking classic private equity investments.
The trend, the report indicated, represents a developed startup ecosystem that is increasingly dependent on public markets for growth capital.
FY25 also marked the first full market cycle for Indian startups after the IPO hype of 2021–22, the subsequent market decline in 2023, and a phase of rationalisation in 2024.
"The whole phase was played against the backdrop of a cyclical economic slowdown in India in FY25," noted the report, while stating that most consumer-facing startups faced squeezed margins and muted revenue growth.
Also, the year saw a big secondary exit deal, with more than ₹20,000 crore of shares being sold through block deals, facilitating private equity and venture capital funds to exit from previous investments.
“FY25 didn’t just test India’s startup listings, it matured them,” said Kashyap Chanchani, Managing Partner at The Rainmaker Group. “The public market has become the preferred playground for India’s breakout companies. We’ve now seen the full arc — the IPO frenzy, the valuation winter, and now a clear re-rating driven by fundamentals.”
The report also identified dramatic structural changes in the market. Of particular note was the rise of mutual funds' involvement in listed startups, with average holdings by RainGauge Index companies — a hand-picked portfolio of public startups followed by Rainmaker — increasing from 10% in March 2024 to 14% by March 2025.
Foreign investor sentiment also changed during the year. While there was a sharp net outflow of ₹78,000 crore during the first quarter, driven principally by macro uncertainties abroad, foreign institutional investors staged a big comeback during the fourth quarter, supported by rate cut expectations and India's stable economic indicators.
Rainmaker Group, which published the report, is a boutique investment banking firm focused on India's private market ecosystem.
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