Indian startups raised $11.7 billion in FY 2025–26 (FY26), registering an 18% decline from $14.3 billion in FY25, according to a report by Tracxn.
Despite the drop, India remained the fourth-highest funded startup ecosystem globally, behind the United States, United Kingdom, and China, while staying ahead of Germany and France.
Mixed Trends Across Funding Stages
Funding trends varied significantly across different startup stages:
- Seed-stage funding:
- $1.3 billion in FY26
- ↓ 15% from $1.5 billion in FY25
- Early-stage funding:
- $4.8 billion in FY26
- ↑ 33% from $3.6 billion
- Late-stage funding:
- $5.6 billion in FY26
- ↓ 38% from $9.2 billion
This indicates a shift in investor focus toward early-stage startups, despite overall moderation.
Sector-wise Performance
Key sectors attracting funding included:
- Enterprise Applications:
- $3.6 billion (unchanged from FY25)
- Fintech:
- $2.4 billion
- ↑ 14% growth
- Retail:
- $2.4 billion
- ↓ 32% decline
The data reflects continued importance of technology-driven sectors in India’s growth story.
Big Deals and Investor Sentiment
- Only 13 funding rounds above $100 million in FY26
- Down from 23 such deals in FY25
Neha Singh noted that while overall funding slowed, strong early-stage investments show sustained investor confidence in scalable and innovative startups.
Exit Activity: IPOs Rise, Acquisitions Fall
- Acquisitions:
- 129 deals in FY26 (down from 151)
- IPOs:
- 47 IPOs in FY26
- ↑ 52% from 31 IPOs in FY25
Major startups that went public include:
- Lenskart
- Groww
- Meesho
Rise in Unicorns
- 6 unicorns in FY26
- Up from 4 unicorns in FY25
This reflects improving valuation momentum despite funding slowdown.
Top Startup Hubs in India
- Bengaluru:
- 33% of total funding (top hub)
- Mumbai:
- 21% of total funding
These cities continue to dominate India’s startup ecosystem.
Conclusion
Although total funding declined in FY26, India’s startup ecosystem remains resilient and globally competitive. Strong early-stage investments, rising IPO activity, and growth in unicorns indicate a maturing ecosystem focused on long-term innovation and scalability.