A fund co-managed by the banking arm of Sumitomo Mitsui Financial Group Inc. plans to invest most of the $200 million it has raised in Indian startups, betting on the country’s thriving initial public offering market to create strong exit opportunities.
India’s IPO market has already crossed 16 billion dollars this year, supported by increasing demand from retail investors, insurers and domestic mutual funds. This surge is encouraging more venture capital and private equity firms to use the stock market as a platform for stake sales and exits.
“The ability for these companies to tap into public markets upon maturity creates a valuable liquidity event for potential investors,” said Rajeev Ranka, partner at the SMBC Asia Rising Fund.
Since its launch nearly two years ago, the fund has invested 100 million dollars across a dozen startups in India and Southeast Asia, including Vayana Pvt, Modifi and M2P Solutions Pvt. Ranka said a few additional investments are in the final stages of completion.
SMBC aims to deploy the full 200 million dollars by the second half of 2026, with around 25 per cent of the capital allocated to startups in Singapore, Indonesia and Vietnam.
According to Ranka, India’s fintech ecosystem stands out for its exceptional level of innovation and scalability, setting it apart from other Asian markets.
This startups investment focus further strengthens SMBC’s growing presence in India. It follows the Japanese financial group’s recent acquisition of a 20 per cent stake in local lender Yes Bank Ltd for 1.58 billion dollars.
The SMBC Asia Rising Fund, co-managed with Japan’s Incubate Fund, typically acquires stakes in companies with a holding period of five to six years. The fund aims to achieve a double-digit internal rate of return as it expands its footprint across Asia’s fast-growing startup ecosystem.
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