How do startups get funding in India? The 2026 numbers for founders

Startups in India raise money from investors in funding rounds and, for a small number, through government schemes that run via incubators, venture funds and lenders. Tracxn counted $11.7 billion across 1,632 funding rounds for Indian tech startups in FY 2025-26, down 18% in dollars and 34% in rounds, and only 459 companies were funded for the first time.

How much did Indian startups raise in FY 2025-26, and how many were funded for the first time?

Tracxn's annual report for FY 2025-26, which covers 1 April 2025 to 31 March 2026, puts funding for India Tech startups at $11.7 billion across 1,632 rounds. That is 18% lower in dollars than the $14.3 billion of FY 2024-25 and 34% lower in rounds than that year's 2,488. The stage split moved unevenly: seed funding was $1.3 billion (down 15%), early-stage $4.8 billion (up 33%) and late-stage $5.6 billion (down 38%).

Calendar 2025 showed a similar pattern. As reported by People Matters on 19 December 2025, Tracxn put 2025 funding at $10.5 billion, down 17% from $12.7 billion in 2024, with seed funding at $1.1 billion (down 30%).

The first half of 2026 changed the shape more than the direction. Tracxn's H1 2026 report, covering 1 January to 24 June 2026, records $7.2 billion across 652 rounds, with capital up 12% and deal count down 43% against H1 2025. Money rose while deals fell, so the average round was larger. Late-stage funding was $3.8 billion across 44 rounds, the lowest number of late-stage rounds in Tracxn's dataset.

For 1 January to 21 September 2026, People Matters reported on 25 September 2026 that Tracxn counted $10.3 billion across 1,134 rounds, up 7% in dollars and down 38% in rounds. Seed funding in that period was $698 million, down 37%, while early-stage funding was $4.2 billion, up 27%.

The table gathers the main readings with their periods.

Tracxn recorded 459 first-time funded companies in India in FY 2025-26, down 32% from 678 the year before, and 218 in H1 2026, down 31%. Tracxn defines first funding as the first recorded round on its platform, so the count covers tech companies with a recorded first round and not all new startups.

Against the world, India's 459 compare with 5,663 first-time funded companies globally, 2,533 in the United States, 1,460 in Europe, 133 in China and 113 in South-East Asia. Tracxn ranks India the 4th highest funded country in FY 2025-26 with $11.7 billion, about 1% of $538 billion in global funding. Tracxn also counted 13 rounds of $100 million or more in FY 2025-26, down from 23, including Nxtra ($710M private equity) and Neysa ($600M Series B).

Seed deal counts show the same narrowing. Tracxn counted 420 seed rounds in H1 2026 against 938 in H2 2023, though its H1 2026 report ends on 24 June 2026, so the two half-years are not the same length. Recognition is a separate matter from funding, and who can get DPIIT startup recognition sets out what the certificate does and does not give.

Who invests at seed stage, and which cities and sectors take the money?

Tracxn names Inflection Point Ventures, Rainmatter and Venture Catalysts as the top seed-stage investors in India Tech for FY 2025-26, and Peak XV Partners, Accel and Lightspeed as the top early-stage investors. The ranking uses Tracxn's own measure of activity, and it does not mean any of those firms accepts unsolicited pitches. The ranking shows who writes seed cheques most often, and it is not a route for reaching them.

By city, Bengaluru-based tech firms took 33% of all funding in FY 2025-26, with Mumbai next at 21%. In dollars, Tracxn's top cities were Bengaluru ($3.9 billion), Mumbai ($2.4 billion), Gurugram ($1.6 billion), Noida ($929 million) and Delhi ($588 million). The gap between where startups register and where money lands is set out in the city-by-city comparison.

By sector, Tracxn's top funded feeds were Alternative Lending ($1.1 billion), Online Grocery ($869 million), AI Infrastructure ($735 million), Investment Tech ($717 million) and Electric Vehicles ($706 million). At sector level, Enterprise Applications raised $3.6 billion, FinTech $2.4 billion and Retail $2.4 billion (down 32%). Capital concentrated in lending, infrastructure and enterprise software. That describes where investors put money, not which idea a first-time founder should pick.

How does government money reach startups, and how does it not?

The Fund of Funds for Startups does not write cheques to founders. SIDBI provides capital to SEBI-registered Alternative Investment Funds (AIFs), which invest in startups. By the end of FY 2025-26 more than Rs 7,000 crore had been disbursed to over 135 AIFs, which had invested more than Rs 26,900 crore in over 1,420 startups, and the government has notified Startup India Fund of Funds 2.0 with a corpus of Rs 10,000 crore. The amount disbursed to AIFs was Rs 980+ crore in FY 2024-25 and Rs 1,039+ crore in FY 2025-26.

The Startup India Seed Fund Scheme (SISFS), implemented from 1 April 2021, gives financial assistance to seed-stage startups through incubators. PIB's release of 17 April 2026 says 219 incubators have been selected, the entire Rs 945 crore corpus has been committed, and incubators have approved over Rs 605 crore to more than 3,400 startups. The release also says the scheme has been extended to enable continued disbursement and completion of approved activities, so founders should check Startup India for its status before assuming it takes fresh applications.

CGSS, operationalised by NCGTC from 1 April 2023, enables debt funding through eligible financial institutions. More than 410 loans worth over Rs 1,250 crore had been covered by the end of FY 2025-26, and the cover per borrower rose from Rs 10 crore to Rs 20 crore in that year. In the annual columns, 130 loans worth Rs 305 crore in FY 2024-25 became 135+ loans worth Rs 600+ crore in FY 2025-26.

The Union Budget 2025-26 announced a new Fund of Funds with a fresh contribution of Rs 10,000 crore, a Deep Tech Fund of Funds to be explored, and term loans up to Rs 2 crore for 5 lakh first-time women, Scheduled Caste and Scheduled Tribe entrepreneurs over the next 5 years. These were announcements, and each scheme's operational status needs confirming before a founder applies. In every case the route runs through an incubator, a lender or a fund, not the ministry.

What do the 2026 numbers mean for a founder raising a first round?

First-time funded companies fell 32% in FY 2025-26, there were 420 seed rounds in H1 2026 against 938 in H2 2023, and nine-month seed funding fell 37%. A founder raising a first round is competing for fewer seed deals than in recent years.

The dollar growth sat later in the funnel, in early-stage funding, which rose 33% in FY 2025-26 and 27% in the first nine months of 2026, while seed funding fell.

Funded companies are a minority of those tracked. Tracxn tracks 180,227 Indian tech companies, of which 18,044 have raised funding. The blog's guide to starting a startup in India covers the route from idea to first customer.

Where does the Founders Cohort fit alongside this?

The Leap by Masai Founders Cohort is a programme for aspiring founders that moves from an in-person start in Goa through an online build phase to an in-person pitch event in Bangalore for teams that meet the benchmarks. It covers problem discovery, building a live MVP, talking to users, finding distribution, pricing and investor pitching, with sessions led by founders and practitioners. It promises no funding.

Frequently asked questions

How do startup founders get money?

Through funding rounds from investors, which Tracxn counted at $11.7 billion across 1,632 rounds in FY 2025-26, and through government schemes that route money via incubators, venture funds and lenders. Only 459 Indian tech companies were funded for the first time in that year, so a first round reaches few companies.

How much funding does Startup India give?

Recognition itself gives none. The schemes are separate: by the end of FY 2025-26 SISFS had committed its Rs 945 crore corpus through 219 incubators, and the Fund of Funds had disbursed more than Rs 7,000 crore to over 135 AIFs. Each scheme works through an intermediary, and terms change, so Startup India carries current rules.

How much money can a startup receive under the Startup India Seed Fund Scheme?

The published figures are scheme-wide: a Rs 945 crore corpus committed through 219 incubators, with over Rs 605 crore approved to more than 3,400 startups. Incubators decide who receives funding, and PIB says the scheme has been extended to complete approved activities, so its current status needs checking.

Can I start a startup with no money?

Startup India recognition has no fee, and the cost of incorporating the company is separate. Outside funding is the minority route among tracked tech companies: of the 180,227 Indian tech companies Tracxn tracks, 18,044 have raised funding. Those figures do not show how the other companies were financed, so they neither rule out nor confirm starting with no outside money.

Who are the most active seed investors in India?

For FY 2025-26, Tracxn names Inflection Point Ventures, Rainmatter and Venture Catalysts as the top seed-stage investors in India Tech. The ranking is by Tracxn's measure of activity. It is not a statement that any of them accepts unsolicited pitches, and it gives no cheque size or base city for any of them.

Next step

The Founders Cohort, Leap by Masai page sets out the curriculum and how to apply.