Secondary Sales Yield 16x Returns for Deep-Tech Funds in India: IVCA Report

Secondary sales have emerged as a primary exit route for deep-tech funds operating across India's startup ecosystem, even as capital flows and public listings in the sector have expanded over the past decade, according to findings from an Indian Venture and Alternate Capital Association (IVCA) report released from Chennai.

The IVCA deep-tech report stated that 56% of surveyed investment funds have completed secondary sales to secure exits. Mergers and acquisitions followed, with 40% of funds achieving liquidity through M&A transactions. In contrast, initial public offerings accounted for exits across only 10% of the funds surveyed, while 33% of deep-tech funds reported having realized no exits to date.

Despite secondary sales leading in actual execution, investor preferences lean heavily toward strategic acquisitions. According to the report, 88% of surveyed funds cited strategic M&A as their preferred exit path. Secondary sales ranked as the second most favored option among 73% of respondents, followed by public market listings at 69%.

From a financial performance standpoint, secondary transactions delivered the highest returns across exit types. The report noted that secondary sales generated an average return multiple of 16x, significantly outpacing the roughly 5x returns recorded for public market exits.

The report also highlighted a sharp divergence between liquidity volume and realized returns across different classes of investors. Domestic investors led in terms of total exit count, whereas global investors captured the largest and most concentrated payoffs across the sector.

Overall capital deployment in India's deep-tech sector expanded significantly, with funding surging to $2.96 billion in 2025. However, the report noted that a persistent funding gap in the Series B and Series C stages remains a key financial constraint for growth-stage deep-tech companies seeking expansion.