India’s startup funding landscape in Q2 2026 showed signs of a cooldown, as both deal value and volume softened on a quarter-on-quarter basis, according to DealStreetAsia DATA VANTAGE’s latest report.
Total private equity and venture capital investments in Indian startups stood at $4.08 billion across 261 deals in April-June 2026 quarter, marking a 14.3% decline from $4.76 billion raised in Q1 2026, according to the India Deal Review: Q2 2026.
The report further showed that the slowdown was more pronounced in deal volume, which fell 25.4% from 350 transactions in the previous quarter, signalling growing investor caution and tighter scrutiny of early-stage bets.
However, on a year-on-year basis, funding rose nearly 24% from $3.3 billion in Q2 2025, highlighting a shift towards larger deals despite fewer transactions.
Megadeals—defined as transactions worth $100 million or more—gained traction during the quarter, contributing about $2 billion across seven deals, up from $1.8 billion in Q1. While the number of such deals remained the same compared to last year, their total value nearly doubled—pointing to bigger cheque sizes and renewed late-stage appetite.
Large transactions led by companies such as CRED, KreditBee, and Rapido played a significant role in shaping the quarter’s funding landscape.
Sectorally, funding remained highly concentrated among a few key industries. Financial services emerged as the clear leader, raising $1.45 billion across 32 deals, driven by major rounds including CRED’s $900-million raise and KreditBee’s $280-million funding. Software followed with $752 million across 51 deals, making it the most active sector by deal volume, supported by strong investor interest in AI-led platforms such as Sarvam.
Transportation services ranked third, raising about $241 million across just three deals, largely due to Rapido’s $240-million round. Together, these three sectors accounted for nearly 60% of total funding.
Geographically, Bengaluru regained its position as India’s leading startup hub, raising $2.51 billion across 93 deals. While deal volume declined from Q1, funding nearly doubled, indicating a surge in large-ticket transactions. Gurugram secured the second spot with $455.6 million across 45 deals, while Mumbai slipped to third, witnessing a steep decline in funding value despite a slight increase in deal count.
Together, the top three cities accounted for around 83% of total funding, highlighting continued geographic concentration.
Stage-wise, funding activity in Q2 2026 was led by growth-stage deals, which accounted for 59% of total capital deployed, with $2.5 billion raised across 37 transactions—marking a sharp increase from the previous quarter. In contrast, early-stage funding weakened, with pre-seed and Series A rounds seeing notable declines in both value and volume.
Accel and Info Edge Ventures emerged as the most active investors in Q2 with 10 investments each. Indian Angels Network (IAN) occupied the second place with nine investments, of which the platform led investments in seven. Rainmatter ranked third with eight deals.
“In Q2, roughly 49% of all capital deployed went into just 2.7% of deals. The result is a barbell: large cheques for proven category leaders, disciplined small cheques at seed and early stage, and a squeeze in the middle. Three things matter most for recovery: sustained exit proof, fresh fund vintages, and policy-driven de-risking in targeted sectors,” said Ankit Kedia, founder & lead investor, Capital A.
The India Deal Review: Q2 2026 report offers data and insights on:
- Quarterly fundraising trends
- Top industries and verticals
- Top funding destinations
- Megadeal value and volume
- List of most active investors
