Venture capital investments in Indian B2C e-commerce companies decreased by 33%

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.

Investments in artificial intelligence are beginning to yield tangible commercial benefits as companies demonstrate profit growth and increased operational efficiency. For instance, Santander reported that its AI initiatives generated €194 million ($216 million) in business value during the first nine months of 2026, while Novartis and Standard Chartered noted improved profitability. Meta linked its advertising revenue growth to AI, and Google Cloud's revenue more than doubled, reaching nearly $31 billion in the third quarter, highlighting the growing commercial return on this technology.

Domestically, the Dutch investment group Prosus moved closer to acquiring a stake in Navi, led by Sachin Bansal, after the Competition Commission of India (CCI) approved the proposed deal. This approval followed Navi raising $100 million from Prosus in August, which marked the first round of institutional funding for the Bengaluru-based fintech company. This transaction will strengthen Prosus' presence in India's digital financial services market.

In other news, Binance announced it has recovered about 95% of the $6.3 billion in assets stolen in a major security incident, using its own funds and reserves. The exchange has begun a phased restoration of cryptocurrency withdrawals after completing security checks, continuing work to locate the remaining 5% of less liquid tokens. Binance confirmed that users will not suffer financial losses.

Meanwhile, countries at the UN COP17 biodiversity summit agreed on a roadmap to accelerate nature conservation by 2030. The plan includes reducing harmful subsidies and increasing funding for conservation efforts, although a significant funding deficit remains a challenge to achieving global biodiversity goals.

Today's newsletter discusses various topics. Regarding venture capital, investments in Indian startups remained moderate in October due to the lack of large deals negatively impacting overall capital inflow. This trend continued in the last week of the month, when startups raised $115 million across 29 deals. The largest transaction was an investment of $15 million in the healthtech startup Cent, and two deals involved AI startups. As 2026 draws to a close, the investment climate is expected to remain largely unchanged, with hopes for recovery deferred to 2027.

Discussion of Technology Sector Prospects

At the TechSparks 2026 event, Priya Narasimhan from Indus Appstore and Sagar Gaonkar from Eloelo Group asserted that India needs greater control over app discovery, distribution, and billing. They also emphasized how AI-ready platforms, localized experiences, and affordable pricing can help bring another 500 million users online.

Venture funding for Indian startups showed a moderate pace in October, which was attributed to the absence of large deals. Throughout the month, no deal exceeding $100 million was closed, and the weekly inflow of funds remained below the $200 million mark.

In the last week of October, total funding amounted to $115 million across 29 deals, surpassing the $96 million attracted in the previous week. The largest deal this week was a $15 million investment in the medical technology startup Cent.

Despite 29 transactions in the week, no major deals emerged. Notably, two of these deals involved startups specializing in pure artificial intelligence, and it is expected that this number will increase in the coming months.

As the end of the year approaches, the inflow of venture capital into Indian startups is not expected to significantly differ from the figures of 2025. This highlights the challenges the ecosystem continues to face in attracting large volumes of capital, partly due to the lack of a strong investment history in AI in the country. However, a turning point is predicted for 2027.

The medical technology startup Cent attracted $15 million from Blume Ventures, South Park Commons, and private investors. The startup Simplismart, which focuses on AI inference infrastructure, received $14 million from Dallas Venture Capital, NVIDIA, Accel, Shastra VC, and Micromax.

The AI startup Live2 ai attracted approximately $14 million (130 crore rupees) led by IvyCap Ventures. The food and snack brand Troovy raised about $10.4 million (100 crore rupees) from Fireside Ventures, Sharrp Ventures, and other investors.

The social gaming platform Matiks attracted $10 million from General Catalyst, Ronnie Screwvala, Info Edge Ventures, Tanglin Venture Partners, and Untitled Ventures. The nutraceutical company Ace Blend received $9.91 million from 3one4 Capital and Fireside Ventures. Finally, the luxury watch manufacturer Rotoris attracted about $8.5 million (70 crore rupees) from Blume Ventures, 9Unicorns, Centricity, and private investors.