The next VC playbook: over 50% to AI infra; climate tech rises and consumer holds steady

The venture capital scene in India is undergoing a significant transformation as it adapts to new investment trends. The India Venture Capital Report 2026, produced by Bain & Company in collaboration with the Indian Venture and Alternate Capital Association (IVCA), reveals that the VC and growth equity market reached approximately $16 billion in 2025, marking two consecutive years of growth. Traditionally, sectors like SaaS, fintech, and consumer technology have attracted substantial investment, albeit at a more cautious pace. However, as artificial intelligence (AI) takes the spotlight in 2026, investors are redirecting their focus towards AI-oriented ventures. Apoorva Ranjan Sharma, Co-founder of Venture Catalysts and 100Unicorns, emphasizes that 50% of VC capital is expected to be directed towards AI infrastructure. He highlights that India is on the verge of a significant AI transformation, with limited time to spare. In contrast to the United States, which has spent over a decade cultivating its AI ecosystem, India is now poised to emerge as a major player in AI infrastructure, which includes data centers, servers, and essential data infrastructure. Sharma points out that the foundation of AI relies heavily on data—both synthetic and real—necessitating enhanced processing capabilities and server expansion. "AI infrastructure represents a tremendous opportunity for India," he states. Aditya Singh, Co-founder and Partner at All In Capital, shares a similar perspective, noting the challenges in monetizing consumer-led models in recent years. He believes that sectors such as AI and deep tech are establishing the groundwork for the coming decade of innovation. While these ventures may take longer to develop, they possess the potential for more sustainable and impactful outcomes. Singh also highlights that 60 to 70% of venture capital is now flowing into AI-related opportunities, distinguishing between core AI innovations and AI-driven applications. Beyond AI, Sharma identifies climate tech as a burgeoning investment avenue. While this sector has garnered attention for years, significant deal activity has been sporadic. A notable recent example is Varaha, a climate tech company that has successfully raised $45 million in a Series A funding round to help farmers earn carbon credits. Sharma anticipates a rise in climate-focused funds in India, similar to the burgeoning AI investment landscape. Globally, venture capital tends to yield returns across three primary sectors: deep tech, consumer tech, and sustainability, a pattern that India is likely to emulate. Singh notes that while investors maintain a long-term bullish outlook on India’s growth trajectory, immediate allocations are affected by macroeconomic factors, particularly currency fluctuations. Despite this, domestic investment and select global funds continue to support ongoing investment activity. As new investment themes gain momentum, consumer tech is expected to remain a vital component of the VC landscape, attracting steady capital alongside emerging sectors like AI infrastructure and climate technology.