Japan's largest financial institution, Mitsubishi UFJ Financial Group (MUFG), is preparing to launch a dedicated India-focused startup fund worth $250 million (approximately ₹2,300-2,400 crore), according to a report by The Economic Times citing sources familiar with the development. The move reflects the growing confidence of global investors in India's startup ecosystem and comes at a time when several international venture capital firms are increasing their investments in the country.

The report stated that the proposed fund will primarily focus on early-stage fintech startups. However, it may also support select growth-stage companies. Sources indicated that the size of the fund could eventually be increased to $400 million, depending on investment opportunities and market conditions.

The fund will be led by Mayank Shiromani, who currently serves as deputy chief investment officer at MUFG Innovation Partners. Through this initiative, MUFG aims to strengthen its presence in one of the world's fastest-growing startup markets and expand its investment footprint in India's technology-driven sectors.

The development comes as a new wave of venture investors becomes increasingly active in India. Since 2025, several global investment firms have stepped up their participation in the country's startup landscape. Their growing involvement has helped compensate for the decline in investments from some of the biggest names that previously dominated the market.

According to the report, investors such as MUFG, Susquehanna Asia VC, Enrission India Capital, SMBC Asia Rising Fund and Mirae Asset Global Investments have expanded their activities in India. These firms have been investing across sectors, including fintech, consumer internet and digital services, reflecting broader confidence in the country's long-term growth prospects.

Data from Venture Intelligence, cited by The Economic Times, highlights a significant slowdown in activity from Tiger Global. The investment firm completed 55 deals in India in 2021 and 47 deals in 2022. However, its investment activity dropped sharply to just six deals in 2025. The report further noted that Tiger Global has not made any investments in Indian startups so far in 2026.

SoftBank has also reduced its participation in India's startup ecosystem. According to the report, the Japanese investment giant has not made a new startup investment in India since 2022. The decline in activity from large global investors has created opportunities for newer and more focused venture capital firms to enter the market and secure promising deals.

The report also highlighted MUFG's previous investment efforts in India. In 2022, the company launched the $300 million Ganesha Fund, which mainly targeted growth-stage fintech startups. The new India-focused fund is expected to deepen MUFG's involvement in the startup ecosystem by increasing its exposure to early-stage companies and emerging business models.

Industry experts believe that current market conditions have made India an attractive destination for venture capital investments. Startup valuations have become more reasonable compared to previous years, making investment opportunities more appealing. At the same time, competition among investors has eased as several large funds have slowed their activity. The continued rise in digital adoption and online consumption has further strengthened confidence in the country's startup ecosystem.

Commenting on the investment climate, Puneet Kumar, CEO of Mirae Asset Venture Investments, told the newspaper that "the current environment is allowing investors to access stronger opportunities as fewer large global funds are actively competing for deals."

Financial services-focused investors are particularly optimistic about the future of fintech in India. The report noted that recent regulatory developments have improved prospects for the sector. Areas such as co-lending, cross-border payments and co-branded cards are attracting growing interest from investors looking to benefit from the next phase of fintech growth.

With a new dedicated fund and increasing investor confidence in India's startup market, MUFG's latest move underlines the country's importance in the global venture capital landscape. The proposed fund is expected to strengthen support for innovative startups while contributing to the continued growth of India's fintech ecosystem.