Key Takeaways
- • Corporate venture capital (CVC) participation in Indian startups is growing about 7% year-on-year, according to PwC India, but most Indian CVC units are risk-averse and lack tailored roadmaps.
- • Globally, corporate startup spending reached a 20-year high of USD 73.1 billion in 2020, and CVC funding peaked rather than plunged during the COVID-19 pandemic, which PwC reads as evidence that such investment is now treated as a necessity.
- • Between 2019 and 2024, India's peak CVC and other-investor funding came in 2020 (USD 13.4 billion) and 2021 (USD 18.4 billion), and 2024 saw a strong rebound with per-deal funding comparable to 2020 levels.
- • Indian CVCs primarily pursue financial returns rather than strategic adjacencies, mirror the VC ecosystem, and most invest at later stages, with USD 29.21 billion of funding in later rounds versus far fewer seed-stage dollars.
- • PwC India proposes a three-pillar roadmap for CVC setup (Strategy, Structure, Operations) to help companies use open innovation to make value chains resilient to technological disruption.
Summary
Corporate venture capital units in India are expanding their participation in startups, with funding participation rising at about 7% year-on-year, according to a PwC India analysis by Amarjeet Makhija and Vishnupriya Sengupta. The authors argue that most of these units remain risk-averse and lack tailored roadmaps, and that CVCs offer a compelling route to open innovation. Unlike traditional venture capital firms, CVCs prioritise strategic benefits such as access to external innovation, partnerships and resilience to disruption over pure financial returns.
Globally, corporate spending in startups increased sharply after 2018 and reached a 20-year high of USD 73.1 billion in 2020, the year of the COVID-19 pandemic. PwC interprets the peaking of CVC funding during the pandemic as a sign that companies no longer view startup investment as discretionary, and that they are more likely to double down during upheaval. India showed a similar peak: between 2019 and 2024, the highest CVC and other-investor funding was recorded in 2020 (USD 13.4 billion) and 2021 (USD 18.4 billion), while deal counts peaked at 1,068 in 2021 and 1,072 in 2022. Per-deal funding was lowest in 2022, and 2024 saw a strong rebound, with funding rising over 2023 and per-deal amounts comparable to 2020 levels.
By sector, retail and consumer received the most funding from CVCs and other investors over the six-year period at USD 21.54 billion across more than 1,200 deals, followed by financial services and products at USD 12.84 billion across 636 deals. Geographically, Bengaluru led with USD 21.1 billion, followed by Mumbai at USD 18.4 billion and the National Capital Region at USD 17.1 billion. PwC notes that Indian CVC activity remains concentrated in major cities, unlike VCs, which are moving into tier-2 and tier-3 cities.
PwC identifies several structural features of Indian CVCs. They typically rely on VCs for evaluation and due diligence, often operate within consortia, and are driven primarily by financial returns rather than strategic adjacencies. Most investment occurs at later stages, although the largest number of CVC and other-investor transactions (2,491) occurred at the seed stage. The report suggests Indian CVCs may need to shift toward strategic goals, and cites a Japanese automotive company's India-based impact CVC arm as an example of impact investing that can diversify portfolios and meet corporate social responsibility objectives.
To address these gaps, PwC India proposes a roadmap built on Strategy, Structure and Operations. The strategy pillar calls for goals aligned with corporate topline strategy and an investment mandate benchmarked against global competitors and sized to the corporate's financial capacity and R&D budget.
Globally, corporate spending in startups increased sharply after 2018 and reached a 20-year high of USD 73.1 billion in 2020, the year of the COVID-19 pandemic. PwC interprets the peaking of CVC funding during the pandemic as a sign that companies no longer view startup investment as discretionary, and that they are more likely to double down during upheaval. India showed a similar peak: between 2019 and 2024, the highest CVC and other-investor funding was recorded in 2020 (USD 13.4 billion) and 2021 (USD 18.4 billion), while deal counts peaked at 1,068 in 2021 and 1,072 in 2022. Per-deal funding was lowest in 2022, and 2024 saw a strong rebound, with funding rising over 2023 and per-deal amounts comparable to 2020 levels.
By sector, retail and consumer received the most funding from CVCs and other investors over the six-year period at USD 21.54 billion across more than 1,200 deals, followed by financial services and products at USD 12.84 billion across 636 deals. Geographically, Bengaluru led with USD 21.1 billion, followed by Mumbai at USD 18.4 billion and the National Capital Region at USD 17.1 billion. PwC notes that Indian CVC activity remains concentrated in major cities, unlike VCs, which are moving into tier-2 and tier-3 cities.
PwC identifies several structural features of Indian CVCs. They typically rely on VCs for evaluation and due diligence, often operate within consortia, and are driven primarily by financial returns rather than strategic adjacencies. Most investment occurs at later stages, although the largest number of CVC and other-investor transactions (2,491) occurred at the seed stage. The report suggests Indian CVCs may need to shift toward strategic goals, and cites a Japanese automotive company's India-based impact CVC arm as an example of impact investing that can diversify portfolios and meet corporate social responsibility objectives.
To address these gaps, PwC India proposes a roadmap built on Strategy, Structure and Operations. The strategy pillar calls for goals aligned with corporate topline strategy and an investment mandate benchmarked against global competitors and sized to the corporate's financial capacity and R&D budget.
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