**Japanese VCs Eye Indian Market Amid Growing IPO Activity**
Japanese venture capitalists (VCs) are beginning to take notice of the Indian market, although many remain cautious. While those investing in India are keeping their fund sizes and investment amounts modest, there is a growing recognition of India’s potential. Nao Murakami, founder and general partner at Incubate Fund Asia, noted in a recent interview that Japanese investors are increasingly aware that the Southeast Asian market presents challenges, while India is emerging as an accessible opportunity. He highlighted the booming IPO market in India as an additional incentive for investment.
In 2022, Incubate Fund Asia successfully closed a $30 million fund, with 80% allocated to Indian startups. The firm has previously invested in notable companies such as Captain Fresh, Yulu, ShopKirana, and Plum. Looking ahead, Murakami indicated that the firm plans to raise its largest fund yet, targeting between $75 million and $100 million, with a focus on Indian ventures.
The Indian IPO landscape has been robust, with 119 companies going public in the first half of 2025, raising approximately ₹51,150 crore (around $6.1 billion), according to S&P Global Market Intelligence. In contrast, Southeast Asia saw only 53 IPOs during the same period, raising over $1.4 billion, as reported by Deloitte. In 2024, Indian markets raised an impressive $19.5 billion from 268 IPOs, while Southeast Asia managed about $3 billion from 122 offerings. The largest IPO in India last year was Hyundai Motor India, which raised $3.3 billion, whereas the biggest offering in Southeast Asia was a $531 million IPO from Malaysia’s 99 Speed Mart Retail Holdings Berhad.
Some Japanese VCs are accelerating their investments in India. BeyondNext Ventures, which entered the Indian market in 2019, has shifted from a cautious approach to a more aggressive strategy. Jay Krishnan, the firm’s partner and head of India investments, stated that they have backed 14 Indian ventures so far, primarily using funds from Japan. They are now in the process of raising a $50 million India-focused fund from their Japanese limited partners.
As the Indian market continues to thrive, it is becoming increasingly attractive to foreign investors, particularly from Japan, who are eager to capitalize on the opportunities presented by the country’s dynamic startup ecosystem and flourishing IPO market.
**FAQ**
**Why are Japanese VCs interested in the Indian market?**
Japanese VCs are recognizing India’s potential as an emerging market with a booming IPO landscape, offering opportunities that are less challenging compared to Southeast Asia.
