Private Equity and Venture Capital (PE-VC) firms invested $126 million across 11 deals in companies based in Tamil Nadu during the third quarter of 2025.
During the same quarter in 2024, the State attracted PE-VC investments to the tune of $728 million across 11 deals, according to the data shared by Venture Intelligence, a research service focused on private company financials, transactions, and their valuations. The data includes venture capital type investments, but exclude PE investments in real estate.
Big investment
In September of this quarter, private equity firm Westbridge Capital invested $72 million in Kovai Pazhamudir Nilayam as part of a fresh funding round. This was one of the biggest investments that came in during the quarter, as per data collated by Venture Intelligence.
Even angel investments during the quarter did not match the levels of previous quarters and years. Between July and September 2025, the State recorded only six angel investments. During Q3 of 2024, Tamil Nadu saw 11 angel investments.
SaaS firms hit
Arun Natarajan, founder and managing director of Venture Intelligence, said “Investors have raised enough money. And there is more money in the system. But there are lot of uncertainties.”
Earlier, investors were betting on SaaS firms. But now, SaaS firms are impacted because of AI (Artificial Intelligence). And if the SaaS sector is affected, Chennai is automatically impacted. All those mega rounds of funding is now history, he added.
To a query on what sectors are attracting investors, Mr. Natarajan said: “SpaceTech and DeepTech firms are doing quite well – that is the flavour of the season. Drone and defence-related start-ups are getting attention.”
At the national-level, PE-VC firms invested over $5.67 billion (across 299 deals) in Indian companies during the period from July to September 2025.
The investment amount represents a 26% decline over the $7.63 billion (across 339 deals) invested in the same period during 2024.
Deal volume in the third quarter of 2025 fell by 12% compared to same period in 2024.
Published – October 03, 2025 05:09 am IST
