The Tech Panda takes a look at what’s buzzing in the startup ecosystem.
As per Vodafone Idea’s third edition of its flagship ‘Ready for Next MSME Growth Insights Study 2025’, digital investment is on the rise as cloud and cybersecurity gain importance. 76% MSMEs target to ramp up investments in cybersecurity.
Geographically, South India leads the digital charge, with Telangana topping national DMI rankings. Though digital maturity is growing, only 12% of MSMEs are fully digitalized. In fact, financial capacity remains a crucial challenge to digital adoption.
Arvind Nevatia, Chief Enterprise Business Officer, Vodafone Idea Ltd said, “MSMEs in India are clearly moving from digital curiosity to digital commitment — and that’s an encouraging shift. The sharp rise in investment intent around cloud, cybersecurity, and automation shows that small businesses increasingly see technology as a growth enabler, not just a utility. Through Ready for next program, our aim is to celebrate incredible growth journeys of India’s MSMEs – from small towns to global markets, from manual processes to being digital-first enterprises.”
As per Kinara Capital’s 4th edition of its MSME Insights, the Indian MSME sector shows a growing shift toward formalization, and the persistent reliance on cash transactions in the sector. 81% of MSMEs expect revenue growth in the next 1-2 years. 84.3% still rely significantly on cash transactions even though 51.7% are now GST-registered, signaling increased formalization and 29.4% show interest in GST-linked loan products.
Hardika Shah, Founder & CEO, Kinara Capital, said, “The fact that 81% of respondents in our recent MSME Insights survey expressed confidence in their growth prospects speaks volumes about the sector’s resilience and ambition. This optimism is rooted in improved access to formal credit, which enables entrepreneurs to focus on expansion. However, the sector’s continued reliance on cash transactions highlights the need to accelerate digitization. Embracing digital payments can enhance financial transparency and significantly boost access to formal credit. Ultimately, digitization holds the key to reaching underserved MSMEs and closing India’s INR30 lakh crore credit gap.”
Last month, Inflection Point Ventures (IPV), an Indian angel investment platform launched the ‘IPV International, a US$110 M Category I Angel Fund registered under GIFT City’s IFSCA (International Financial Services Centres Authority) framework. The fund will lead or participate in early-stage to pre-Series A rounds, building a diversified portfolio, with average ticket sizes ranging from US$ 100K to US$ 1 M. The fund has secured both the Fund Registration Certificate and the Fund Management Entity (FME) license from IFSCA, enabling it to operate fully within GIFT City’s regulatory framework. The fund operates under the International Financial Services Centres Authority (IFSCA), which serves as a SEBI-equivalent unified regulator.
Vinay Bansal, Founder CEO, IPV, says, “After establishing a strong presence in the Indian startup ecosystem, IPV is now extending its offerings through IPV International. Given the evolving global startup landscape and the rising appetite for international exposure, launching an international fund allows us to seamlessly participate in cross-border investment opportunities. By leveraging GIFT City’s global access framework, we can now invest in high-potential international businesses. A presence in GIFT City enables us to scale beyond national borders, engage with global startup ecosystems, and remain aligned with the rapidly shifting dynamics of the venture capital and private equity markets. At the same time, we are seeing strong interest not just from Indians & NRIs, but also from non-Indian investors eager to invest in the booming Indian startup ecosystem and the GIFT City structure makes it significantly easier for them to invest.”
Also in July, Avalanche, a blockchain platform tied up with Team1, a global network of builders, developers, creatives, and community members to launch a pilot US$100,000 Team1 India Mini Grant fund, aimed at empowering and accelerating the Web3 ecosystem in India.
Devika Mittal, Regional Head at Ava Labs, said “India is rapidly gaining reputation as a major hub for Web3 developers globally and is projected to be the largest by 2028. Currently, there are 1200 Web3 startups in India and we aim to significantly increase this number by 2026 through our #Team1MiniGrants fund. Our initiative will fill the funding gap for web3 projects and create a level playing field for talented developers. In particular, we hope to see young developers, both men and women, applying to the fund.”
Avalanche is aggressively betting on India to create one of the world’s largest Web3 ecosystems. Most developers entering the Web3 space are newcomers and under the age of 27. Young developers lose passion due to insufficient funding opportunities and lack of quality mentorship. This initiative represents a significant commitment to fostering innovation and driving the next wave of digital advancements in the region.
KredX, an Indian integrated supply chain finance platform, signed MoU between the Ministry of Micro, Small & Medium Enterprises (MoMSME), Government of India, and KredX’s technologically advanced TReDS platform, Domestic Trade Exchange (DTX).
Manish Kumar, Founder and CEO, KredX, said, “This strategic step perfectly aligns with KredX’s core goal to empower MSMEs by simplifying supply chain finance through seamless digitisation. Access to real-time Udyam registration data via this two-way API will revolutionise our onboarding process and how we serve these crucial businesses, enabling us to provide quicker, more efficient, and data-driven supply chain financing solutions. This will significantly aid us in reaching and supporting an even wider network of MSMEs nationwide, fostering their growth and contribution to the economy.”
Banks like DBS Bank India Limited (DBIL) has waived prepayment and foreclosure charges for all Micro, Small, and Medium Enterprises (MSMEs) borrowers registered with UDYAM, making it easier for businesses to access credit and manage cash flow.
Sudarshan Chari, Managing Director, and Head – SME Banking, DBS Bank India, said, “Access to flexible and affordable credit remains a critical need for micro, small and medium enterprises. By waiving prepayment and foreclosure charges, we are addressing a common challenge that often limits financial agility. This change enables businesses to repay loans early without penalty and reallocate funds towards immediate priorities or critical areas like inventory, technology, and expansion. It aligns with our broader efforts to support MSMEs with need-based solutions that strengthen their resilience and unlock long-term growth.”
In June, Poonawalla Fincorp launched fully digital business loans for MSMEs, an industry-first digital loan solution backed by a pioneering digital risk assessment model tailored for micro, small, and medium enterprises (MSMEs). The offering provides instant approval with a risk-first approach and flexible repayment options, the NBFC said in a statement. Designed to address the credit needs of MSMEs with speed, convenience, and simplicity, it offers a fully digital onboarding and approval journey through a Straight Through Processing (STP) model, it said. This eliminates the need for branch visits or physical paperwork, delivering a user-friendly and secure experience across all touchpoints, it said.
Arvind Kapil, MD and CEO, Poonawalla Fincorp, said, “We believe that with India’s $4 trillion economy, MSMEs will be one of the most robust credit growth segments over the next 10 years, and our assumptions are based on India’s strong financial infrastructure—credit bureau data, GST information, account aggregators, and strong risk analytics. This product, which we will gradually build into the portfolio in a sensible, risk-calibrated manner, will be an industry first, and we believe it will be a very strong and convenient offering for all good-quality MSMEs.”
