Indian startups are increasingly looking towards overseas acquisitions as a strategic move to achieve scale, diversify revenue streams, and validate their valuations. This trend signifies a maturing ecosystem where companies are seeking inorganic growth to supplement organic expansion.
In 2025, outbound deals by Indian companies reached a record high, with 26 transactions valued at $1.1 billion. Simultaneously, domestic acquisitions also saw a three-year high, reaching $4.1 billion across 137 transactions. This surge in M&A activity reflects a broader strategy among Indian startups to leverage acquisitions for rapid expansion, access to intellectual property, and entry into new markets.
Several factors are driving this trend. Late-stage startups, particularly those that raised capital at peak valuations, are finding that organic growth alone is insufficient to justify their valuations. Acquisitions provide a faster route to boosting topline revenue and achieving the scale required to compete globally. Category leaders in sectors like SaaS, gaming, and deeptech are actively targeting assets in the US and Europe.
Examples of significant outbound transactions include NXP Semiconductors' acquisition of U.S.-based Kinara AI for $307 million and Narayana Hrudayalaya's purchase of UK-based Practice Plus Group Hospitals. These deals highlight the strategic motivations behind overseas acquisitions, such as acquiring technology, intellectual property, and access to global customer bases.
Industry experts anticipate continued momentum in M&A activity in 2026, driven by IT services consolidation, the need for innovation, and growth in managed offerings. Large private equity investments made in 2021-22 are also approaching exit cycles, creating both demand and supply-side pressures in the market.
Furthermore, government initiatives are also playing a role in encouraging international expansion. For example, government-backed programs are placing Indian AI startups in fully funded residencies overseas, facilitating customer acquisition and commercial outcomes.
The rise in overseas acquisitions signifies a strategic shift in the Indian startup ecosystem. While challenges remain, the trend towards global expansion through M&A is expected to continue as Indian startups strive to become global players.
