India fourth-highest funded country in FY26, with funding falling 18%

India retained its position as the fourth-highest funded startup ecosystem globally in FY26 despite an 18 per cent drop in funding, with early-stage investments and IPO activity showing resilience

In terms of cities, Bengaluru accounted for 33 per cent of total funding | Photo: Shutterstock.com

Udisha Srivastav New Delhi

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Indian startups raised $11.7 billion in the financial year 2025-26, marking an 18 per cent decline from $14.3 billion in the financial year 2024-25. The country ranked fourth-highest funded globally, behind the United States, the United Kingdom, and China, and ahead of Germany and France, according to the latest India Tech Annual Funding Report released by market intelligence platform Tracxn.

The funding trends varied across stages as seed-stage startups raised $1.3 billion in FY26, marking a 15 per cent decline from $1.5 billion raised in the previous financial year. However, early-stage funding showed strong momentum, rising to $4.8 billion, a 33 per cent increase from $3.6 billion. On the other hand, late-stage startups raised $5.6 billion, marking a 38 per cent decline from $9.2 billion raised in FY25.

Commenting on the insights, Neha Singh, co-founder of Tracxn, said, “While overall funding saw moderation, the strong momentum in early-stage investments highlights continued investor confidence in startups building differentiated and scalable solutions.”

Singh added that the sustained traction in sectors such as enterprise applications, fintech, and retail reflects the growing importance of technology-led transformation across industries. In FY26, the country witnessed 13 funding rounds exceeding $100 million, compared to 23 such rounds in FY25. However, large deals were driven primarily by enterprise infrastructure, enterprise applications, and fintech.

Enterprise applications received $3.6 billion in FY26, the same as in FY25. Fintech secured $2.4 billion in funding, a 14 per cent increase from $2.1 billion in FY25, while retail raised $2.4 billion, registering a 32 per cent decline from $3.5 billion.

The startup ecosystem recorded 129 acquisitions compared to 151 in FY25. On the IPO front, India recorded 47 IPOs, a 52 per cent increase over 31 IPOs in FY25. A few major companies that went public recently include Lenskart, Groww, and Meesho. There were six unicorns, reflecting a 50 per cent increase compared to four in FY25.

In terms of cities, Bengaluru accounted for 33 per cent of total funding, maintaining its position as the country’s top startup hub, followed by Mumbai with 21 per cent of total funding.

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First Published: Apr 09 2026 | 1:50 PM IST