Venture capital (VC) funding for Indian startups reached a new low in October, showing a 66% decrease compared to October of last year. Compared to September 2025, the drop was 49%.
The total volume of venture funding in October amounted to only $581 million, whereas in October 2025, this sum reached $1.6 billion. In September 2026, the funding volume was at $1.1 billion.
There were 107 deals closed in October. This is more than the 100 deals in September, but the amount raised in September was higher. A similar situation was observed in October 2025, when the number of deals was 99.
The sharp decline in funding in October is attributed to the complete absence of large deals throughout the period. The largest deal of the month was made by Even Healthcare for $50 million. A previous similar decline was recorded in May, when the total volume reached $651 million.
These trends highlight the difficulties faced by the startup ecosystem in attracting capital. Global investors, especially from the US, are directing funds towards artificial intelligence (AI), while India does not yet have a significant number of viable AI startups.
Several AI companies in India that managed to attract funding include Sarvam, Emergent, and Neysa. This indicates that India has a long way to go in creating AI startups that interest investors.
In the first ten months of 2026, Indian startups attracted $10.4 billion, allowing the ecosystem to approach or exceed the total of $12 billion recorded in 2025.
The slow pace of funding also reflected in stage categorization. The late-stage category, which usually attracts the largest amount, received only $97 million in October. The growth category led with $250 million, followed by the early stage at $221 million.
The dominant trend for the Indian startup ecosystem over the past three years is the highest volume of activity in terms of deal count in the early-stage funding category, although this segment does not attract large sums of money.
Among the three main segments that attracted capital in October, D2C, healthtech, and automotive industry were the leaders. The AI segment attracted only $42 million this month.
The three cities that received venture funding in October remained the traditional centers: Bengaluru, Delhi-NCR, and Mumbai. Overall, these three metropolises consistently receive the vast majority of funding directed to Indian startups, although other cities such as Chennai, Hyderabad, or Pune sometimes make it into the top three.
Overall, the picture for the Indian startup ecosystem in terms of venture funding does not look positive yet, and the only hope is that the situation will improve next year.



