Securing the Deal: How VDRs Are Becoming Indispensable for Indian Startups and Unicorns Raising Capital

India’s startup ecosystem is experiencing a remarkable transformation. After a global slowdown in funding, 2024 witnessed a significant rebound with VC investments surging to USD 13.7 billion, 1.4× the 2023 levels. That momentum has continued into 2025, with India securing the third position globally in tech startup funding during the first half of the year, with $4.8 billion raised, according to Tracxn’s ‘India Tech Semi-Annual Funding Report H1 2025’. This leap from fourth place the previous year, in the face of a 25 % YoY dip, underscores the ecosystem’s resilience.

Amid this boom, 159,000+ recognised startups and 119 unicorns by mid‑2025, creators of fintech, SaaS, and deep‑tech companies are navigating increasingly complex capital rounds. Gone are the days when fundraising meant scattered email exchanges and unsecured file shares. Today, virtual data rooms (VDRs) are taking centre stage, delivering seamless, secure workflows tailored for high-stakes dealmaking.

The Urgent Case for VDRs

Imagine a growing SaaS unicorn preparing for a $100 million Series D. Term sheets, cap tables, vendor contracts, customer POCs, and regulatory filings need to be shared with dozens of domestic and global investors, all under NDA and tight timelines. Traditional sharing methods stumble here: inconsistent controls, versioning chaos, and no visibility over who saw what when. VDRs change that narrative.

These platforms offer encrypted storage with multi-layered access rights, allowing founders to restrict downloads, set expiry dates, and watermark sensitive documents. AI-driven tagging and search tools make it effortless for investors to locate key information, whether it’s IP ownership, audit trails, or compliance certificates, without manual sifting.

For fintech and SaaS startups contending with SEBI, RBI, or upcoming data-protection regulations in India, VDRs provide audit-ready logs, document retention policies, and watermarked access that satisfy both investor scrutiny and regulatory demands. Instead of scrambling to replicate folders, teams can upload once and reuse across financing rounds, audits, or M&A, saving weeks and reducing risk.

What’s Fueling VDR Adoption in India

Tier II/III boom: Nearly half of India’s startups now hail from smaller cities, yet receive under 4 % of VC funding. These founders often lack institutional support and benefit tremendously from VDRs that provide professional-grade diligence workflows across time zones.

Fintech & SaaS leadership: With India ranking second globally in fintech adoption, startups handling sensitive user data and complex vendor agreements rely on VDRs to manage compliance and investor scrutiny.

Government backing: Initiatives like Startup India simplify registration, IP protection, and tax schemes, but also raise expectations for standardised documentation. VDRs help startups meet these standards effortlessly, increasing investor confidence, especially from SEBI-regulated entities and family offices.

Top VDR platforms in India deliver a cohesive suite of features. These capabilities streamline fundraising, diligence, compliance, and post-deal collaboration across every stage, from seed to IPO.

• Bank-grade encryption and secure sharing, ensuring both at-rest and in-transit safety.

• Granular folder-level permissions, allowing time-boxed and role-specific access.

• AI-based document tagging and full-text search, enabling investors to locate critical information in minutes.

• Comprehensive audit trails and dynamic watermarks, deterring leaks and demonstrating compliance.

• Cloud integrations & customizable branding, making it easy to launch a polished diligence portal in hours.

• Mobile-first access and SSO, supporting remote teams and global investor interactions.

The Indian VDR market is on a fast track, from about USD 101.5 million in 2024 to a projected USD 421.5 million by 2030 (CAGR \~27.8 %). That trajectory mirrors the ecosystem’s rise, from financings and M&A to global IPO ambitions.

In today’s era, deal velocity and data privacy are paramount. Therefore, VDRs are strategic assets. For Indian startups and unicorns striving to attract world-class capital while maintaining tight control over sensitive processes, adopting a robust VDR platform is foundational.

As the India story advances, the ability to tell it securely and professionally, with confidence and clarity, can make all the difference when the stakes are high.

 Mr. Harvinder Singh, Founder and CEO of Confiex Data Rooms