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Venture capital (VC) investment in India surged considerably to $4 billion in the April-June period (Q2 2024), from $2.9 billion in the previous quarter, a report said on Thursday. 

On the other hand, China saw a massive decline in VC investment from $13.5 billion to $6.9 billion in the same period.

VC investment is expected to continue to pick up in India, driven in part by the country's stable government and positive economic environment, according to a KPMG report.

During the quarter, VC investors in India focused on more traditional sectors for investment, including fintech, electric vehicles, and consumer technologies.

Unlike many other jurisdictions where investment in the consumer-focused technology space has dried up dramatically, India's population and demographics have kept investment in the space relatively resilient, the report mentioned.

The IPO market in India continued to be robust. The capital markets saw all-time highs during Q2’24, feeding the appetite of venture companies looking to raise funds in the public markets.

"Investors continue to remain optimistic about India and as mentioned in the previous edition, our expectations of VC investments to bounce back are now playing out," said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.

Strong demographics, robust economy and a vibrant capital market are the real drivers behind this optimism.

"Investors will however remain cautious and will continue to back sectors and companies which have a good operating model and an assured path to profitability," Poddar added.

VC investment in Asia dropped from $20.8 billion to $17.4 billion, driven largely by a decline in China.

"VC investment in other jurisdictions in the region saw solid increases. In Singapore, it rose from $1 billion to $2.6 billion, and in Japan, it rose from $842 million to $1.1 billion. Consumer e-commerce companies raised the largest rounds in Asia in Q2 2024," the findings showed.

Global VC investment rose from $75.4 billion in Q1 to a five-quarter high of $94.3 billion in Q2.

Heading into Q3, VC investment globally is expected to remain relatively steady, with AI continuing to attract a large share of funding, said the report.