India's tech startup funding drops 18% in FY26 as late-stage deals slump: Tracxn

Indian technology startups' total fundraise declined by 18% to $11.7 billion in 2025-26, market intelligence firm Tracxn said on Wednesday.

The technology startups had raised $14.3 billion in the financial year 2025.

"India's startups raised $11.7 billion in FY 2025-26, marking an 18% decline from $14.3 billion in FY 2024-25, but a 20% increase compared to $9.7 billion raised in FY 2023-24," Tracxn's India Tech Annual Funding Report 2026 said.

According to the report, India is ranked as the fourth-highest funded country globally in FY 2025-26, behind the US, UK, and China, and ahead of Germany and France.

The funding of seed-stage startups declined by 15% to $1.3 billion in FY26 from $1.5 billion raised in FY25.

"Early-stage funding (when start-ups plan to scale up business) showed strong momentum, rising to $4.8 billion in FY26, a 33% increase from $3.6 billion raised in FY 2024-25, and a rise of 37% compared to $3.5 billion raised in FY 2023-24.

"Late-stage startups raised $5.6 billion in FY26, marking a 38% decline from $9.2 billion raised in FY25, but an 18% increase compared to $4.7 billion raised in FY24," the report said.

In 2025-26, India witnessed 13 funding rounds of more than $100 million, compared to 23 such rounds in FY25 and 13 in 2023-24.

"Large deals were driven primarily by the Enterprise Infrastructure, Enterprise Applications, and Fintech with companies raising notable capital, including Nxtra’s $710 million PE round, Neysa's $600 million Series B round, and Inox Clean Energy’s $344 million Series D funding," the report said.

FinTech and retail emerged as the top-performing sectors in FY 2025-26.

Enterprise Applications received $3.6 billion in 2025-26, which is the same as in FY25, but a 23% increase from $2.9 billion raised in FY24.

FinTech firms secured $2.4 billion in funding, marking a 14% increase from $2.1 billion in FY25 and a 27% rise compared to $1.9 billion raised in FY24.

Funding of retail startups declined by 32% to $2.4 billion in FY26 from $3.5 billion in 2024-25 and a 19% decrease compared to $2.9 billion raised in FY24.

"On the IPO front, India Tech recorded 47 IPOs in FY 2025-26, marking a 52% increase over 31 IPOs in FY 2024-25 and a 47% rise compared to 32 IPOs in FY 2023-24.

"Major IPOs during the year included Lenskart, Groww, and Meesho. There were 6 unicorns created in FY 2025-26, reflecting a 50% increase compared to 4 in FY 2024-25," the report said.

(Except for the headline, Fortune India has not edited the content of this PTI report.)