Indian startup funding falls 10% as investors favor early-stage AI
Business
Indian startups just had a tougher year: funding fell by about 10% in FY26, dropping to $10.16 billion across 969 deals (down from $11.34 billion and 1,020 deals FY25).
The big shift? Investors are moving away from large late-stage bets and putting more focus on early-stage startups, especially those working with AI.
Indian late-stage decline, AI funds rise
Abhishek Srivastava from Kae Capital shared that most of the drop is in big funding rounds, as investors now want stronger profitability and stricter valuation discipline before writing big checks.
Still, there is a bright spot: AI startups are actually attracting more money. In 2025 alone, 16 AI-focused funds raised nearly $1.9 billion, showing that if you are building something cool with AI, investors are still interested.