The number of startups recognized by the government increased by 51.6% on year to 55,200 in 2025-26, which is the highest number recognised in a single year since the launch of the Startup India initiative in 2016.

Since inception, the number of recognized startups has crossed 2.23 lakh as on 31st March 2026, generating more than 23.36 lakh direct jobs. More than 1.07 lakh recognized startups have at least one woman director or partner, accounting for approximately 48% of total recognized startups, a statement by the Ministry of Commerce and Industry said.

Even as capital inflows remain steady this year, India’s startup ecosystem is seeing a sharp shift in how funds are being deployed across stages. In the first three months of this year, tech startups raised $3.95 billion across 350 rounds, nearly the same as last year but in barely half the number of deals.

In Q1 2025, tech startups had raised $3.93 billion across 628 rounds, as per Tracxn data.

The sharp drop in deal volume, coupled with flat funding levels, points to a market that is becoming increasingly selective, with investors writing larger cheques into fewer companies that show sustainable growth. Data showed that the median round size has increased to $2 million in Q1 from $807,000 during the same quarter last year.

The rapid rise of AI coding tools has triggered a surge of startups offering so-called “vibe coding” platforms in the US and India. But after an early funding rush and lofty valuations, many of these companies are grappling with a more difficult challenge: sustaining margins.

The platforms rely heavily on large language models (LLMs) from providers such as OpenAI, Anthropic and Google. Access to these advanced models typically comes through paid APIs, making model usage one of the largest cost components for AI coding startups.

Margin Squeeze
“Gross margins across the category are under severe pressure,” Deepak Dhanak, co-founder and chief operating officer of Rocket.new, told Fe. “Most platforms are operating below 50% gross margins, with many in the 20–30% range,” he added.

NVIDIA has partnered with AI Grants India (AIGI), an AI-focused non-profit, to support early-stage founders in India through the NVIDIA Inception startup programme, with the initiative aiming to help enable up to 500 new AI startups over the next 12 months.

AIGI said the collaboration is designed to reach over 10,000 early-stage founders in the next year through access to AI tools, technical training and other benefits intended to help teams move faster from concept to product.

What founders get: model access, training and infrastructure support
Co-founded by Bhasker (Bosky) Kode and Vaibhav Domkundwar, AIGI positions itself as a platform providing inference, infrastructure, grants and resources for early AI builders, as per the company. It said the goal is to remove a key hurdle for founders, paid model access, by offering instant access to the latest AI models.

Mumbai-based AI infrastructure startup Neysa has attracted a major investment led by US private equity firm Blackstone, as it moves to rapidly expand GPU capacity in India amid rising demand for domestic AI computing. Blackstone, along with co-investors Teachers’ Venture Growth, TVS Capital, 360 ONE Assets and Nexus Venture Partners, will invest up to $600 million as primary equity, as per the company. The funding will give Blackstone a majority stake in the company. Neysa is also planning to raise another $600 million through debt, the company added. The combined fundraising marks a sharp step-up for the company, which had raised $50 million earlier.

The government on Friday approved the second Startup Fund of Funds (FFS) with an outlay of Rs 10,000 crore for startups in early stages and those involved in deep-tech research. Prime Minister Narendra Modi signed the file for the fund. It was among the first set of decisions taken from his new office Seva Teerth. The second FFS with an outlay of Rs 10,000 crore was announced in the budget for this financial year. It is a continuation of the first FFS announced in 2016 whose Rs 10,000 corpus has been fully utilised. Technology based deep tech start-ups typically take longer to do proof of concept and success. The focus of the new fund will be to make more risk capital available for them.

India has preferential or zero duty market access to 70% of global Gross Domestic Product (GDP) through trade agreements and the start-ups should not limit themselves to domestic markets, commerce and industry minister Piyush Goyal said Thursday. Addressing the Pfizer INDovation Startup Showcase Programme, he said that startups should be participating in global exhibitions and fairs for which the ministry will provide support. India’s missions in over 190 countries are available to assist innovators and he also encouraged collaboration with global companies to access developed markets. There are 2 lakh registered start-ups and many more unregistered, Goyal referred to the Andhra Pradesh MedTech Zone (AMTZ) near Visakhapatnam and expressed interest in establishing a similar facility in North India, possibly in Rajasthan or Uttar Pradesh, or within NICDC (National Industrial Corridor Development Corporation) industrial projects with dedicated land for medical devices and co-working spaces for startups.

The white-collar hiring in the quick commerce segment grew 21% in January 2026 as the ultra-fast, hyperlocal delivery model has entered a second phase of maturity, said the latest Indeed report. Even though the yearly hiring growth was robust, the overall white-collar hiring in q-comm is showing signs of moderating with just 14% growth over six months and 4% over three months. “Hiring remained positive but became increasingly deliberate, aligned to unit economics and operational efficiency rather than rapid footprint growth. This signals a shift from hyper-expansion to controlled, sustainable scaling,” the report said. Rise of the Data Professional While delivery partners and dark-store operations continued to form the bulk of workforce demand, white-collar roles accounted for 14% of total quick-commerce job postings. Within white-collar roles, the growth was strongest roles such as data, analytics, supply chain & network planning, category management & pricing, and product & operations tech.

Several new-age tech-based companies reported improving profitability in the December quarter, underscoring a continued shift away from growth-at-all-costs strategies towards more sustainable business models. Of the 12 major startups that have reported results so far for the October-December quarter, nine showed an improvement in their bottomlines, with most also posting double-digit revenue growth. Payments and fintech firms were among the strongest performers. MobiKwik swung to a profit of Rs 4 crore in Q3 from a loss of Rs 53 crore a year earlier, helped by sharply lower lending-related expenses. Pine Labs reported a profit of Rs 42 crore compared with a loss of Rs 57 crore in the year-ago period, as it continued to pivot towards software-led and higher-margin deals.

India has overhauled its startup recognition framework, widening access to policy benefits by raising turnover thresholds, extending eligibility timelines for deep-technology firms and bringing cooperative societies into the ambit of the Startup India programme. Under new norms notified by the Department for Promotion of Industry and Internal Trade, a startup will now be defined as an entity up to 10 years from incorporation with turnover not exceeding Rs 200 crore in any financial year. For firms recognised as deep tech startups, the eligibility window has been extended to 20 years, with the turnover cap raised to Rs 300 crore. “The objective is to enable greater support for emerging deep-tech ventures, long-term R&D-driven enterprises & empowering cooperatives to be active participants in India’s rapidly growing entrepreneurial landscape,” commerce and industry minister Piyush Goyal said in a post on X.

India’s startup ecosystem is going through a period of adjustment. Funding has become harder to raise, especially for early-stage companies, and investors are spending more time examining business fundamentals. While venture capital continues to back a small set of fast-growing companies, many founders are finding it increasingly difficult to secure early support. This matters because of the scale of the ecosystem. According to Tracxn, India has more than 620,000 startups, but only about 33,000 of them are funded. The country has produced 125 unicorns, but these represent only a tiny slice of entrepreneurial activity. For the vast majority of founders, venture capital is not the first or most accessible source of backing. It is in this space, between idea and investability, that incubators and venture studios are playing a more visible role. They are offering something traditional investors often do not: time, structure and hands-on support at the earliest stages. As brand strategist Ambi Parameswaran observes, incubators often feel more approachable than venture capital firms, which founders tend to perceive as large, monolithic and intimidating. In incubators, money is often secondary to guidance on people, strategy and execution.

Prime Minister Narendra Modi on Friday said that the momentum of the startup ecosystem is accelerating in the country with nearly 44,000 startups registered in 2025 alone. “This is the biggest jump in any single year since the beginning of Startup India. These figures testify to how our startup ecosystem is driving innovation and growth,” he said at an event marking a decade of Startup India. Ten years ago, there were fewer than 500 startups in the country. Today, this number has risen to more than 200,000. In 2014, India had only four unicorns; today, India has nearly 125 active unicorns, he added.

The formulation of guidelines for operationalisation of second Fund of Funds (FFS) for startups is in advanced stages and will be rolled out very soon, Commerce and Industry Minister Piyush Goyal said on Friday. The second FFS with an outlay of Rs 10,000 crore was announced in the Budget for the current fiscal and is aimed at funding startups in high technology sectors and manufacturing. This is a continuation of the first FFS announced in 2016, the corpus of which has been exhausted. Focus on Deep-Tech “Our aims is to make more risk capital available to deep tech startups. There is more risk in it and the startups may get returns after a long time. Keeping such things in mind, we are going to support them through FFS II,” the minister told reporters.

Startup India has completed ten years with government data showing a structural reset of India’s startup ecosystem, marked by a sharp rise in recognised startups, job creation, capital inflows and faster exits, as policy reforms dismantled long-standing barriers around funding, regulation and market access. Launched in 2016, the initiative has moved India from a fragmented, high-risk entrepreneurial environment to a pipeline-driven startup system backed by institutional capital, simplified compliance and access to public markets. From idea-stage failure to institutional seed funding Before 2016, early-stage innovation in India routinely failed to secure formal backing, with the lack of seed capital cited as the primary constraint by young firms. Angel funding was limited, geographically concentrated and largely dependent on personal networks. This gap was addressed through the Startup India Seed Fund Scheme, launched in 2021 with a Rs 945 crore corpus. As of 2025, 219 incubators across India have been approved to deploy seed capital for proof of concept, prototyping and market entry.

The Maharashtra government is actively working on raising substantial resources to finance innovation, startups, incubators, and accelerators across the state. All state government departments have been instructed to allocate 0.5% of their departmental budgets toward innovation and decentralised regional innovation funds. Shrikant Patil, the Chief Executive Officer of the Maharashtra State Innovation Society (MSInS), estimates that this initiative could create a funding pool of Rs 4,000-5,000 crore to support innovations and startups. The MSInS will serve as the central agency, collaborating with all departments to act as an interface for startups. Plans include seed funding, a state-backed venture fund, and a fund-of-funds.

When Banasthali Vidyapith, near Jaipur, spun off Greenathon Technologies, the idea was simple: turn academic research into real-world impact. Incubated at the local Atal Incubation Centre (AIC), the startup has developed Biozyme – a patented, microbial-based green technology that helps textile units treat wastewater, cut pollution and recycle water. Another example is Ecoil, a woman-led venture that has built a nationwide supply chain to collect used cooking oil from food businesses and convert it into biodiesel. The fuel is sold to aviation companies, creating a closed-loop sustainability model. Supported by AIC funding, Ecoil has raised over Rs 25 crore so far. These startups are part of a wider incubation push. There are about 72 AICs operational across India under the Atal Innovation Mission of NITI Aayog, together supporting more than 3,500 startups and generating thousands of jobs across manufacturing, energy, healthcare, agriculture, education and deep science.

The startup ecosystem is showing clear signs of recovery and maturation, with company shutdowns declining dramatically in 2025. Only 733 startups have shut down through December 31, marking an 81% drop from the 3,903 closures recorded in 2024, according to data from startup intelligence platform Tracxn. The sharp decline represents the lowest annual shutdown count since 2020, when 1,543 companies closed operations. By comparison, 2021 saw shutdowns peak at 6,494 as the market adjusted to post-pandemic realities, followed by 5,281 in 2022, 2,190 in 2023, and 3,903 in 2024. The data suggests that the worst phase of the funding winter may be over, with surviving startups demonstrating stronger fundamentals and more sustainable business models. The decline in shutdowns comes alongside signs of funding stabilisation. After plummeting from a peak of $66.8 billion across 4,830 rounds in 2021 to a low of $33.2 billion across 3,760 rounds in 2023, funding has shown modest recovery. Startups raised $37.6 billion across 3,690 rounds in 2024, with 2025 maintaining similar momentum at $38.7 billion across 2,420 rounds.

After completing its pivot from scheduled delivery to quick commerce with 900 dark stores across 40 cities, Tata Digital-owned BigBasket is now setting its sights on achieving contribution margin positivity by the end of 2026, while aiming for 50-60% revenue growth. Vipul Parekh, co-founder and CMO, BigBasket, speaks with Anees Hussain about the company’s strategic positioning and plans for the year ahead. Excerpts: Where do you stand on dark store infrastructure? We have 900 dark stores, around 5,300 square feet each. About 65-70% are in top 10 tier-1 cities, rest are across 40 tier-2 cities. These serve a 2-km radius, with 80-85% orders from within 1-1.5 km, enabling 10-12 minute delivery. We’ve consciously chosen larger format stores to accommodate more and different kinds of SKUs. The average customer search now begins from quick commerce. Earlier discovery began on Google, then shifted to Amazon or Flipkart. Products customers want quickly have expanded dramatically—from groceries to phones, electronics, festival items, gold coins, etc. The real bottleneck is supply, not demand. Our mid-sized stores deliver more SKUs in a single 10-minute order at lower cost versus splitting pick-ups between large warehouses and mini dark stores.

Quick commerce major Zepto has reported a significant widening of losses for FY25, even as its top line surged. The unicorn’s net loss ballooned 177% year-on-year to Rs 3,367.3 crore in FY25, compared to Rs 1,214.7 crore in FY24, according to audited financial statements filed with the Ministry of Corporate Affairs (MCA). While the bottom line remains under pressure, Zepto’s growth trajectory continues to be steep. Total sales for FY25 stood at Rs 9,668.8 crore, a 129% jump from Rs 4,223.9 crore in the previous fiscal. However, it is important to note that operational revenue, as per industry standards, is typically recognised at 15-20% of gross merchandise value (GMV). This would translate to an operational revenue between Rs 1,500 crore and Rs 2,000 crore. By comparison, Eternal-owned Blinkit, reported revenue of Rs 5,206 crore in FY25, while Swiggy’s Instamart reported revenue of Rs 2,252 crore, during the same period.

Zerodha co-founder Nikhil Kamath and Future Group founder Kishore Biyani have joined hands to launch Foundery, a residential business launchpad aimed at identifying, mentoring and co-building the next generation of Indian entrepreneurs. Positioned as a co-founder factory, the Foundery combines elements of a school, accelerator and venture studio, and is designed to compress the early-stage startup journey into an intensive 90-day programme. Participants will work on taking business ideas from concept to investment-ready ventures, supported by mentors, investors and industry operators. “Most of what we call education was built for a world that no longer exists. It teaches people to fit in, whereas progress comes from those who don’t,” Kamath said. “MBAs create managers. We need people who can build, break, fail and rebuild. The Foundery is for those who want to create their own path.”