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Japanese VCs Bet Big on India's Startup Boom, Shun Southeast Asia
4 Aug
Summary
- Japanese VCs increasingly investing in Indian startups
- India's IPO market outpacing Southeast Asia in 2025
- Japanese firms raising dedicated India-focused funds
As of August 2025, Japanese venture capitalists are increasingly turning their attention to India's booming startup ecosystem, shunning the more challenging Southeast Asian market. According to the article, the development is still in its nascent stage, with most Japanese VCs previously sitting on the fence. However, the tide is now turning, with several firms actively investing in Indian startups.
One notable example is Incubate Fund Asia, which closed a $30 million fund last year with 80% of the capital allocated to Indian companies. The firm is now preparing to raise its largest fund yet, a $75-100 million vehicle with a focus on India. Another Japanese firm, Enrission India Capital, has allocated its entire $120 million fund raised in Japan to Indian startups, citing better returns compared to the domestic market.
The article also highlights the booming IPO market in India, which has outpaced Southeast Asia in 2025. In the first half of the year, Indian exchanges saw 119 companies go public, collectively raising over $6 billion, while Southeast Asia's total was much lower at just 53 IPOs raising $1.4 billion.
This trend has not gone unnoticed by Japanese investors, who are recognizing India's potential as an emerging market open to global players. Firms like BeyondNext Ventures and SMBC's Asia Rising Fund have also increased their focus on the Indian startup ecosystem, backing companies across sectors such as fintech, consumer, climate tech, and deeptech.
