Mitsubishi UFJ Financial Group (MUFG), Japan’s largest financial group, is establishing a $250 million India-focused venture capital fund to support early-stage and growth-stage startups, according to people familiar with the development. The fund size could eventually increase to $400 million as MUFG expands its investment strategy in one of the world’s fastest-growing startup ecosystems.
The new fund will primarily focus on early-stage fintech startups while also exploring opportunities across high-growth sectors within India’s digital economy. Mayank Shiromani, deputy chief investment officer at MUFG Innovation Partners, will lead the fund.
The move comes as a new generation of global venture capital firms and institutional investors intensify their focus on Indian startups. These investors are increasingly filling the gap left by major players such as SoftBank Group and Tiger Global Management, which dominated startup deal-making between 2020 and 2023 but have significantly reduced their activity in recent years.
Since 2025, investment firms including Susquehanna International Group, Enrission India Capital, SMBC Group, and Mirae Asset Financial Group have maintained or increased their investments in India despite a sharp slowdown in capital deployment from previous market leaders.
These investors have actively backed startups across fintech, consumer internet, software services, and digital platforms. Their portfolio companies include Jupiter, DMI Finance, Dhan, Olyv, Skydo, AppsForBharat, Safe Security, Atlys, Snabbit, Pronto, and Battery Smart.
At the same time, global angel investor Lachy Groom has increased his focus on India. After making one investment in 2025, he completed two investments in 2026. His recent portfolio additions include Pronto, Even Healthcare, and Alt Carbon.
Last month, reports indicated that Groom was evaluating investment opportunities in drone technology startup Airbound and aerospace manufacturing company Alteon.
According to Venture Intelligence data, Mirae Asset and MUFG have each participated in four startup funding rounds since the beginning of 2025. Meanwhile, Susquehanna has joined 10 venture deals, while Enrission India Capital has participated in 15 transactions.
In contrast, Tiger Global’s investment activity in India has declined significantly. The firm completed 55 investments in Indian startups in 2021 and 47 in 2022. However, that number dropped to six investments in 2025, while the firm has not completed any investments in India so far in 2026. Similarly, SoftBank made 17 startup investments in 2021 and four in 2022 but has not executed any new investments in the sector since then.
Until now, MUFG primarily used its Ganesha Fund, established in 2022, to invest in Indian fintech startups. The $300 million fund focused mainly on growth-stage companies. However, the new India-focused vehicle will allow MUFG to participate more actively in early-stage startup funding opportunities.
The strategic shift highlights changing investor perceptions of India’s startup ecosystem. Many investors now believe startup valuations have become more realistic, competition for deals has declined, and India’s digital economy has matured significantly over the past decade.
Companies such as Zomato, Swiggy, PhonePe, Groww, Meesho, and Zepto have helped establish digital consumption habits among millions of Indian consumers. As a result, many investors believe the next generation of startups can achieve scale with comparatively lower capital requirements.
This perspective differs sharply from the cautious approach currently adopted by Tiger Global and SoftBank.
“For a US fund today, the opportunity cost is whether they spend time in India or deploy billions of dollars into the top 5 AI (artificial intelligence) companies. For deep India investors like us, this is a great opportunity,” Puneet Kumar, CEO of Mirae Asset Venture Investments, said.
Kumar also highlighted how the current funding environment has improved opportunities for committed investors.
The funding slowdown has improved deal quality for investors still focused on India, he said, adding, “Right now, because others are not active, we are getting much better deals. That is why we feel this is the right time to double down.”
Over the past three years, large financial institutions with strong balance sheets have increasingly shown a willingness to invest in Indian startups capable of addressing opportunities not only in India but also across Southeast Asia.
MUFG’s investment platforms have already deployed close to $100 million into Indian fintech startups. Through the new fund, the financial giant plans to back innovative businesses developing products and services for India’s rapidly expanding population of tech-savvy and internet-native consumers.
Additionally, regulatory reforms have created new opportunities in highly regulated industries such as fintech. Emerging business models, including co-lending partnerships between financial institutions and technology companies, have further enhanced the attractiveness of the sector for investors.
With a strong emphasis on fintech, digital services, and consumer technology, MUFG’s new fund could play a significant role in shaping India’s startup landscape and accelerating innovation-driven growth in the coming years.
