business · 2026-10-10
Indian startups raise $123 mn in a week, but it's a tough market
Photo: via Inc42 Media
Indian startups raised $123 million across 25 deals this week, but funding is down 47% from last week. Most money went to ecommerce, with one big round dominating. Early-stage startups got more attention, suggesting investors prefer smaller, safer bets.
Is the startup funding winter over?
No, one week does not end a funding winter. That week's $122.9 million was a 47.4% drop from the week before. For the first half of 2026, funding fell 9% year-on-year to $5.2 billion. But deals rose 7%, with far fewer $100 million+ rounds. Investors are writing smaller, earlier-stage cheques at rational valuations, not a boom or bust, but a normalisation after 2021–22's exuberance.
How can fewer dollars mean more deals?
Investors are writing more cheques, but smaller ones. In H1 2026, only four rounds were worth $100 million or more, versus 11 the year before. The total value fell 9%, but deal count rose 7% as investors spread thinner slices across more, mostly earlier-stage, startups instead of a few late-stage giants.
Does the first week of October's 47% drop fit the trend?
The 47% drop is a single week of noisy data. That week, ecommerce led with $63.9 million across 9 deals, and DailyObjects raised $34.3 million alone. The week before, fewer but larger deals made the total look higher. A week is weather, not climate.
Who is writing these cheques?
Mostly the usual venture capital firms, but one notable newcomer is BITKRAFT Ventures, a global gaming and interactive media fund. It led StockGro's Series B round. The Korean gaming giant KRAFTON (a video game company) also invested in BITKRAFT's global fund to back Indian startups from pre-seed to Series A, signaling global entertainment companies' interest in India.
What is the bigger picture beyond one week?
Over the first half of 2026, Indian startups raised $5.2 billion across 501 deals, down 9% in value from $5.7 billion in the same period last year, though deal count rose 7%. Giant rounds of $100 million or more shrank from 11 to four, while the median late-stage cheque fell 68% to $10 million. Investors are writing smaller, more disciplined cheques across more early-stage companies, a normalization after the 2021-22 exuberance.
Is this a funding winter or a boom?
Neither, exactly. It is a normalisation. After the exuberance of 2021-22, funding fell 8% in 2025 to $11 billion. In H1 2026, startups raised $5.2 billion across 501 deals, a 9% value drop but 7% more deals. Investors are writing smaller, more disciplined cheques at rational valuations, backing more companies.
Are funded startups genuinely novel or more of the same?
It is a mix. DailyObjects, the biggest raise that week, is a Delhi lifestyle tech brand, originally phone cases, now crossing an annual revenue run rate of ₹320 crore (about $38 million). It is not novel, but well executed. Smaller cheques went to frontier things: Desible.ai and CurvetAI (AI application layer; IONAGE (electric vehicles. Across H1 2026, AI startups raised $676 million across 57 deals, up 317%; deeptech raised $365 million, up 17%. New money is chasing new technology now.
Is this a good time to be a startup?
Yes, for early-stage founders with a real product and discipline. Funding is down 9% to $5.2 billion, but deal volume rose 7%, with money flowing to more, earlier-stage startups. Big cheques are scarce, and public markets are unforgiving, but investors are backing more companies at rational valuations.
Source: inc42.com