Venture capital (VC) investors are becoming more pragmatic about exits, with secondaries, founder buybacks and strategic sales increasingly seen as valid liquidity routes alongside initial public offerings (IPOs). The shift reflects a tougher listing market, where small IPOs are facing delays as mutual funds turn selective, while technology IPOs are also being pushed back by market volatility tied to the West Asia war.
Mint recently reported that companies such as Curefoods, Turtlemint, Indo-MIM, Inframarket, Symbiotech Pharmalabs, Duroflex and KKR-backed Leap India are recalibrating timelines rather than rushing to market.
Secondary activity has become more institutionalised. India saw 51 secondary VC transactions worth $1.1 billion in 2025, up from 45 deals worth $1.5 billion in 2024, according to Venture Intelligence data. Startup M&A was also steady, with 214 deals worth $6.7 billion in 2025, versus 162 deals worth $8.2 billion in 2024, underscoring that liquidity is increasingly being created outside IPOs.
That backdrop helps explain why investors are widening the exit playbook. Mint spoke with VCs, who said secondary funds are becoming more active in India and that investors are increasingly looking at partial exits and other liquidity options.
Nao Murakami, founder and general partner of Incubate Fund Asia, said Indian IPOs remain a key ambition for founders, but investors can no longer rely on them as the sole exit route. With public listings taking longer and secondary opportunities becoming more relevant, the firm is now treating partial exits and other liquidity options as part of normal portfolio management.
“We think there is an opportunity for about $50 million to $60 million in secondary transactions in this financial year,” he said, adding that the firm is increasingly looking to manage exits more systematically rather than waiting only for public listings.
Exit playbook gets wider
Artha Ventures’ founding partner, Anirudh Damani, argued that the public-market route is too cyclical to serve as the default exit strategy. For companies with strong unit economics and strategic relevance, he said, M&A and secondaries can often be better outcomes than waiting for a listing window to reopen.
“Founders should not confuse a public listing with validation…the real question is whether a business can still deliver strong returns and survive without relying on the stock market as the only route out,” added Damani.
Choosing an exit route
Sidharth Pai, founder and general partner of 3one4 Capital, said secondaries had never really gone out of focus, and that IPOs, M&A and secondaries are all simply liquidity events, with founders and investors choosing whichever route is most available. He said the IPO market has turned cold, with too many companies in the queue and no one wanting to be first, while large investors remain cautious and public-market appetite has weakened.
Artha’s private-market exits show why non-IPO routes can still matter. Exotel returned about 113x, with roughly ₹7 lakh invested in 2012 and about ₹7.7 crore realised at exit; Stellar generated about 20x MOIC on roughly $20,000 invested in 2017 and about $400,000 returned through a 2024 founder buyback; and Lemnisk delivered about 17x MOIC through a secondary transaction led by Bajaj Financial Securities. By comparison, Groww’s ₹6,632-crore IPO has already handed marquee investors blockbuster gains, with Peak XV making about 52x, Y Combinator about 29x and Tiger Global about 4.5x.
“At the same time, the market is seeing a growing number of secondary funds coming in, with liquidity likely to flow through them in the next quarter rather than through IPOs,” Pai added.
He, however, said the impact of an exit depends on the investor’s stage. Quoting an example, he said that early-stage backers already sitting on a 100x outcome can still be in a strong position even if that value slips to 80x, but for series B and series C investors, a fall from 8x to 2x matters much more once time value, currency depreciation and opportunity cost are factored in. That is why, he said, later-stage investors need to be far more focused on capital efficiency, de-risking and taking liquidity when it is available.
Apart from secondaries, startup M&A is also staying active, but the mix is changing. In 2026, 84 deals worth $5.91 billion were already closed by 15 May, according to Venture Intelligence, compared with 214 deals worth $6.675 billion in all of 2025 and $8.157 billion in 2024.
Consolidating rather than competing
A case in point is Freo’s acquisition of IndiaLends in early May, which shows how consolidation continues in financial services, where platform depth and licence access matter as much as growth. Mint reported in January that India’s fintech sector is entering a new consolidation phase, with deal activity expected to accelerate in 2026, as fragmented markets and weak profitability are pushing venture-backed fintech startups to combine rather than compete.
In edtech, upGrad’s proposed all-stock acquisition of Unacademy points to the same trend. The deal is expected to value Unacademy at around ₹2,055 crore, a more than 90% markdown from its 2021 valuation of $3.4 billion and below the $300–400 million valuation upGrad had proposed in November before talks collapsed in January. Mint had earlier reported that the transaction reflects a sector still rationalising after the pandemic boom, with deal terms now driven more by consolidation and strategic fit than by frothy growth assumptions.