Indian startup funding dips 9% in H1 2026, AI and deeptech see significant investor interest
Indian startup funding fell 9% year-over-year to $5.2 billion in the first half of 2026, while investments in AI and deeptech surged. Despite the overall dip, investor activity remained robust.
Indian startup funding experienced a 9% year-over-year decline in the first half of 2026, totaling $5.2 billion. However, the total number of deals saw a slight increase of 7%, reaching 501 transactions, according to Inc42's report.
Despite the muted overall funding trend, investor strategies shifted, with a notable focus on ventures in frontier technologies such as artificial intelligence (AI), robotics, and deeptech. Investments in AI startups, in particular, quadrupled to $676 million across 57 deals.
Funding for advanced hardware and technology rose 17% to $365 million, supported by a record 66 deals. Institutional capital continued to favor seed and growth-stage rounds, which collectively raised $478 million. Growth-stage funding increased by 15% to $2.3 billion, while late-stage funding decreased by 29% to $2.2 billion.
Stride Ventures emerged as the most active investor with 61 deals, followed by Alteria Capital with 48 deals, and Zerodha's investment arm Rainmatter with 39 deals. Despite the overall funding dip, investor interest in the Indian startup ecosystem remained strong, with approximately 64% of surveyed investors planning to increase their venture capital allocation in the latter half of 2026.