Bengaluru accounts for 33% of total startup funding in FY26

Bengaluru: Bengaluru maintains its position as the country's leading startup hub, as the city accounted for 33 per cent of total funding- 3.9 billion dollars, followed by Mumbai with 21 per cent (2.4 billion dollars) of total funding.

According to market intelligence platform Tracxn's India Tech Annual Funding Report 2026, which was released on Wednesday, the country's startups raised 11.7 billion dollars in FY26, an 18 per cent decline from 14.3 billion dollars in FY25.

The city also continues to lead in startup acquisitions in the country, topping the charts both in FY25 (58 acquisitions) and FY26 (34 acquisitions). The report said Bengaluru's established ecosystem, deep tech talent pool, and leading role in SaaS, AI, and fintech ensure it outpaces other cities by a significant margin.

While seed-stage startups in India raised 1.3 billion dollars in FY26, a 15 per cent decline from 1.5 billion dollars raised in FY25, early-stage funding showed strong momentum, rising to 4.8 billion dollars in FY26, a 33 per cent increase from 3.6 billion dollars raised in FY25, and a rise of 37 per cent compared to 3.5 billion per cent raised in FY24.

Late-stage startups raised 5.6 billion dollars in FY26, marking a 38 per cent decline from 9.2 billion dollars raised in FY25, an 18 per cent increase compared to 4.7 billion dollars raised in FY24.

Also, the country's unicorn ecosystem in FY26 was highly concentrated, with Bengaluru, Mumbai, and Gurugram accounting for over 74 per cent of unicorns. There were 6 unicorns created in FY26, a 50 per cent increase compared to 4 in FY25.

Neha Singh, Co-Founder of Tracxn, said, “While overall funding saw moderation, the strong momentum in early-stage investments highlights continued investor confidence in startups building differentiated and scalable solutions. The sustained traction in sectors such as Enterprise Applications, FinTech, and Retail reflects the growing importance of technology-led transformation across industries. Additionally, increased IPO activity and unicorn creation indicate improving maturity within the ecosystem, with companies demonstrating stronger fundamentals, capital efficiency, and clearer paths to profitability.”

In FY26, the country's tech startup ecosystem recorded 129 acquisitions in FY26, compared to 151 acquisitions in FY25, a 15 per cent decline in acquisition activity during the year. The number of acquisitions also saw a 2 per cent drop compared to 132 acquisitions in FY24.

On the IPO front, India Tech recorded 47 IPOs in FY26, a 52 per cent increase over 31 IPOs in FY25 and a 47 per cent rise compared to 32 IPOs in FY24. Major IPOs during the year included Lenskart, Groww, and Meesho.