India's Q3 Startup Funding Edges Up 5%, AI and Cleantech Lead

India's startup funding saw a modest 5% year-over-year increase in Q3 2026, reaching $2.2 billion. However, the number of deals declined by 13% to 210, indicating a more selective investment landscape. The quarter saw the creation of two new unicorns, with AI and cleantech emerging as the leading sectors for funding.

The growth stage saw significant investment, with Series A and B rounds surging 38% to $1.1 billion. Conversely, late-stage funding decreased by 10% to $994 million, reflecting investor caution. Early-stage funding also declined, though the median check size improved, suggesting investors are backing fewer but stronger seed-stage companies.

Artificial intelligence (AI) was the most funded sector, attracting $438 million, a substantial 265% year-over-year increase. Cleantech followed closely with $433 million. Funding in deeptech also saw a significant rise, growing 176% to $290 million.

Traditional sectors experienced a downturn, with fintech funding falling 11% to $249 million and e-commerce dropping 31% to $245 million. Bengaluru solidified its position as India's startup hub, raising over $1.4 billion across 80 deals.