"Geopolitics Is The Biggest Risk To Investor Sentiment Right Now"

After two years of cautious capital deployment and investor restraint, India’s startup ecosystem is once again showing signs of renewed momentum. Funding is rebounding across stages, IPO chatter is growing louder, and investor confidence appears to be recalibrating rather than retreating. Early-stage venture capital firm Unicorn India Ventures (UIV) has already surpassed its initial target of Rs 1,000 crore and is now exercising a Rs 200-crore greenshoe option, taking the final close of Fund III to approximately Rs 1,200 crore. Against this backdrop, ANIL JOSHI, Managing Partner at Unicorn India Ventures, offers a grounded perspective on what is truly driving the resurgence. In this conversation with BW Businessworld, Joshi unpacks the role of improved unit economics, India’s macroeconomic strength and the opening of new high-potential sectors such as deep tech, semiconductors, space and defence. He also weighs in on whether the current funding uptick reflects a genuine shift in risk appetite, the sustainability of India’s IPO enthusiasm and the geopolitical risks that could test investor sentiment in the months ahead. Excerpts

- By Resham Suhail

What, in your view, is the single strongest factor driving the sudden rebound in startup funding across stages in India?

India has long been one of the world’s most promising economies, offering significant opportunities for growth. Over the past two years, while investment activity in startups did continue, it remained largely subdued. During this period, many companies that were unable to raise capital—or raised only limited funding—focused on strengthening their unit economics. As a result, several have either achieved profitability or are firmly on the path to it.

Improving macroeconomic conditions, coupled with stronger operational performance and clearer growth opportunities, have made Indian startups more attractive to investors across sectors. In addition, the opening up of new segments such as semiconductors, space and defence has expanded the investment landscape considerably. Overall, India’s outlook over the coming years appears strong, and this is likely to sustain genuine investor interest.