6 days ago
M&A as a Growth Lever in 2025, As VC Funding Slows Down
In H1 2025 alone, there were 73 M&A deals, up from 54 in H1 2024. Notable transactions include Magma General Insurance's USD 516M sale to DS Group/Patanjali and HUL's USD 350M acquisition of Minimalist.
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In 2024, VC funding in India rebounded to USD 13.7 billion, up 1.4 times from 2023, with deal numbers rising to 1,270 from 880 the prior year, driven by a sharp increase in small- and mid‑ticket deals and a rebound in USD 50M+ rounds, according to data from Bain.
Overall PE‑VC investments reached approximately USD 43 billion, close to 1,600 deals in 2024, growing about 9per cent year‑on‑year.
Yet in Q2 2025, VC investments slowed slightly: India saw USD 3.5 billion across 355 deals, up sequentially but pointing to moderation in deal values compared to peaks earlier in the year. Moreover, April 2025 saw startup funding sink to just USD 899 million, a 14‑month low and a 36per cent slide from March. Despite these bumps, M&A activity is gaining traction.
In H1 2025 alone, there were 73 M&A deals, up from 54 in H1 2024. Notable transactions include Magma General Insurance's USD 516M sale to DS Group/Patanjali and HUL's USD 350M acquisition of Minimalist.
"There are M&As, and then there are M&As. Unilever's potential acquisition of Minimalist for USD 350 million is a shot in the arm for D2C startups in India… signals that large-value M&As are becoming possible, providing a path for investors to exit," said Karthik B. Reddy, Partner at Blume Venture, in a company social blog.
Other notable deals in 2025 include Everstone Capital's acquisition of the digital experiences platform Wingify at USD 200 million, and Singapore-based Fullerton Financial Holdings acquired LendingKart at USD 91 million. InCred's acquisition of Stocko at USD 35 million. Hatsun Agro Product, a dairy major, acquired Milk Mantra at USD 27 million.
Private equity exits are increasingly happening through M&A: M&A accounted for about 1 in 3 PE exits, as open-market exits declined amid greater volatility, suggesting that as VC fundraising becomes more selective and public markets fluctuate, consolidation via M&A is playing a bigger role in liquidity and growth.
Manish Kejriwal of Kedaara Capital anticipated a buyer's market in 2025, citing a slowdown in IPOs boosting PE/VC focus on direct acquisitions, according to a report by Reuters.
Late-stage VC deal volume and values have cooled, seed and early stages declined significantly, down 44per cent and 27per cent in H1 2025, respectively, even as India ranked third in tech startup funding globally. Public market volatility and fewer mega‑rounds curb investor appetite for high-risk funding.
M&A activity, especially PE‑backed buyouts and corporate acquisitions, is filling the funding and exit vacuum, helping startups find capital and providing exits for PE/VC firms in the absence of IPO windows.
For sectors like femtech, consolidation is already visible: Proactive For Her being acquired by IVF Access, backed by a common investor, illustrating category-level integration underway.
