India’s VCs are beating Silicon Valley at home

As a tech journalist in Bengaluru, I spent much of the early 2010s writing about Indian startups raising money from Silicon Valley investors.

Every other month, I would find myself looking up a new American venture capital firm that was leading a multimillion-dollar funding round in a startup in Bengaluru or Delhi.

At the time, American VC firms were entering India to place early bets on a country whose startup ecosystem was still in its infancy. India did not yet have a mature risk-capital culture. Most local wealth stayed parked in real estate, gold, or public markets. Investing in young founders with little revenue and ambitious ideas felt foreign.

VCs who invested in companies like Flipkart and Ola — once small teams trying to build Indian versions of Amazon and Uber — earned returns in multiples. For instance, Tiger Global reportedly made roughly $3.5 billion from its Flipkart investment after Walmart acquired the company in 2018 in the world’s largest e-commerce deal at the time.

Over the past decade, India has quietly built a domestic VC ecosystem with founders-turned-investors, family offices, and local funds that understand the country’s complexities far better than foreign firms flying in for quarterly partner meetings.

The dynamics of startup investing in India have shifted, and if you are an American VC firm looking for the next big opportunity, the local investors may already be ahead of you.

Only one American venture capital firm, Accel, featured among the top 10 investors in Indian tech startups over the past year, according to data shared with Rest of World by startup intelligence platform Tracxn.

Entrepreneurs often tell me Indian investors move faster, write smaller early-stage checks more comfortably, and possess a deeper instinct for what works in the country’s fragmented market. They have lived through India’s chaotic internet evolution firsthand: unreliable infrastructure, multilingual consumers, digital payments adoption, and wildly uneven purchasing power.

Rising interest rates in the U.S. and a tougher fundraising environment have made many American firms more cautious internationally. Several crossover investors that aggressively chased Indian startup deals during the boom years have pulled back sharply since 2022.

For years, an American investor on a cap table was viewed almost as a status symbol for Indian founders — validation that their startup mattered globally. Today, many entrepreneurs no longer see Silicon Valley money as essential for credibility. Some Indian funds are beginning to compete abroad, positioning themselves as global technology capital. Last week, at the 2026 SelectUSA Investment Summit, Indian companies announced a record $20.5 billion in investments into the U.S.

The growing confidence of Indian capital in the U.S. is showing up beyond tech startups. The investments announced last week included sectors like technology, AI infrastructure, pharmaceuticals, and advanced manufacturing.