Global VC investment hits $120 billion in Q3 led by AI, exit activity: Report

New Delhi, Oct 23 (IANS) Global venture capital investment reached $120 billion across 7,579 deals in Q3 2025, marking the fourth consecutive quarter above $100 billion, a report said on Thursday.

Artificial intelligence (AI) remained the leading sector for funding, while exit activity rose to $149.9 billion, collectively accounting for a significant chunk of activity, according to the report from global consultancy KPMG.

"India experienced a banner quarter for exits in Q3 2025, with exit value surging to a high not seen in at least seven years. Despite the soft VC investment in Q3, there continued to be optimism in the market given the growth in startup exit activity -- particularly in terms of IPO exits," the report said.

The KPMG report said that due to India’s strong macroeconomic fundamentals and vibrant capital markets, there is substantial optimism that VC investment will begin to rebound once trade uncertainties are resolved.

Further, IPO activity is also expected to increase over the next few quarters in India, the report added.

“Macros are still strong, the capital markets are still vibrant, and a lot of capital has been raised that will need to get deployed—so funding should increase as uncertainties calm. But investors will be focused heavily on the path to profitability and cash flows because without those, you won’t get a capital market exit,” said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.

AI model development and AI-powered applications attracted the largest funding rounds, while investors are also focusing on defence technology, robotics, health technology, quantum computing, and alternative energy. Corporate VC participation rose to $58.6 billion, with the United States at the forefront, while software continued to dominate investment sectors.

Global exit value increased from $119.2 billion in Q2 to $149.9 billion in Q3, marking the highest level since Q4 2021.

--IANS

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