Japan’s largest financial group, Mitsubishi UFJ Financial Group (MUFG), is creating an India-focused fund of $250 million (about Rs 2,300-2,400 crore) to support early- and growth-stage startups. He told that this fund will be invested in early-stage fintech startups. Also, the amount of this fund can be increased to 400 million dollars. It will be led by Mayank Shiromani, Deputy Chief Investment Officer of MUFG Innovation Partners. This development comes at a time when a new wave of big venture funds are betting heavily on early- and growth-stage Indian startups.
These funds are largely replacing funds like SoftBank and Tiger Global, which were very active in deal-making during 2020-23. Funds such as MUFG, Susquehanna Asia VC, Enrison India Capital, SMBC Asia Rising Fund and Mirae Asset Global Investments are continuing or increasing their investments in India through 2025, while fund flows from legacy investors have slowed significantly.
These new investors have invested in startups related to fintech, consumer internet and digital services, which include Jupiter, DMI Finance, Dhan, Olive, Skydo, Apps for Bharat, Safe Security, Atlas, Snabit, Pronto and Battery Smart. Global angel investor Lachie Groom has also increased his investment in India and after making one investment in 2025, he has made two investments in 2026. His recent investments include Pronto, Even Healthcare and Alt Carbon. A few days ago, it was also revealed in the media that Groom was considering investing in drone tech startup Airbound and aviation and aerospace component manufacturing company Alteon.
Accounts of last 5 years
According to Venture Intelligence, Mirae and MUFG have invested in four deals each since the beginning of 2025, while Susquehanna has participated in 10 and Enrichment has participated in 15 venture deals. Tiger Global, on the other hand, made 55 investments in Indian startups in 2021 and 47 in 2022, but the number dropped to six in 2025 and no investments so far in 2026, according to data from Venture Intelligence. SoftBank made 17 investments in Indian startups in 2021 and four in 2022, but made no investments after that. MUFG has so far used its ‘Ganesh Fund’, which was launched in 2022, to invest in Indian fintech startups. This $300 million fund was primarily focused on growth-stage deals, and now with the new fund, MUFG will also be active in early-stage investments, according to people previously quoted.
filling the vacuum
This change reflects the changing perspective about India’s startup sector. Investors who are investing now believe that valuations have come at the right level. There is less competition for deals, and India’s digital consumption habits—developed over the past decade by companies like Zomato, Swiggy, PhonePe, Groww, Meesho, and Zepto—are now so mainstream that the next group of startups can scale even with less capital. This situation is in complete contrast to the huge decline in investments of Tiger Global and SoftBank.
Speaking to ET, Punit Kumar, CEO, Mirae Asset Venture Investments, said that for a US fund today, the opportunity cost is whether they spend time in India or invest billions of dollars in the top 5 artificial intelligence companies. For investors like us who are deeply focused on India, this is a great opportunity. He said the slowdown in funding has improved the quality of deals for investors who are still focused on India. He further said that other investors are not active, so we are getting better deals. That is why we feel this is the right time to increase investment.
Focus on financial sector
Over the past three years, financial services companies with large balance sheets have also shown interest in betting on Indian startups. These startups can also play a big role in South-East Asian opportunities. For example, SMBC Asia Rising Fund has invested in the entire financial services sector in India, from Yes Bank and Shivalik Small Finance Bank in the banking sector to M2P and Modify in the fintech infrastructure segment, and consumer lending startup Olive and trade financing player Vayana.
“We see a huge vacuum in Series B and C (growth) rounds, especially in functional sectors like fintech and financial services,” Rajeev Ranka, partner, India Investments at SMBC Asia Rising Fund, said in a media report. In these sectors, the depth of the business is evident, with strong technology stacks and more attractive valuations than the AI or deep-tech sectors. This fund has so far invested approximately $100 million in Indian fintech startups. These investors are trying to support startups that are building something for the technology-savvy and internet-native Indian population.
