India’s startup ecosystem — the third largest in the world — showed renewed funding momentum in the first week of February, shortly after the announcement of Union Budget 2026. Investor sentiment appeared to strengthen as Indian startups collectively raised $130.5 million between February 2 and February 6registering a 36% increase from the $95.6 million raised in the previous week.

The funding activity also saw a slight increase in deal volume, with 20 startups securing investmentscompared to 18 deals in the week prior. While the numbers indicate cautious optimism rather than a full-scale funding boom, they reflect continued investor interest across emerging and established sectors.

Credits: The Statesman

Ecommerce Emerges As The Funding Champion

Ecommerce startups dominated the funding landscape both in terms of deal volume and capital raised. The sector attracted $65.9 million across seven dealsaccounting for nearly half of the total weekly funding.

Leading the funding charts was The Whole Trutha D2C nutrition and wellness brand, which secured $51 million in a Series D round. The round was led by Sauce.vc and Sofina, with participation from Peak XV Partners, Rainmatter Health, AYRA Ventures, and Z47. The significant investment highlights the growing demand for clean-label and health-focused consumer brands in India.

Other ecommerce players that raised funds included Material Depota vertical marketplace for construction materials, which secured $10 million in Series A fundingand Good Monka nutrition-focused D2C startup that raised $3.6 million. Smaller D2C brands such as 1.5 Degree, WHAT KUMand Invogue also secured early-stage investments, signalling continued investor interest in niche consumer brands.

AI Startups Continue To Draw Investor Attention

Artificial Intelligence maintained its strong appeal among investors, emerging as the second-most funded sectorraising approximately $21 million across four deals.

Among the notable fundraises was Loop AIan enterprise AI platform focused on restaurant back-office operations, which secured $14 million in Series A funding led by Nyca Partners. The startup aims to simplify financial and operational workflows for modern dining businesses.

Another AI startup, AI fiberraised $5.7 million in a seed round led by Accel. Meanwhile, Vibrium and Mindcase also secured early-stage funding, reflecting growing investor confidence in AI-driven enterprise and application-layer solutions.

Quick Commerce And Consumer Services Gain Momentum

The quick commerce sector continued to attract capital, with BLUE raising $15.3 million in a Series A round led by Peak XV Partners. The investment underscores ongoing investor belief in rapid delivery models despite operational and profitability challenges within the sector.

Hyperlocal services also saw funding traction. Dr. Doodleya consumer services startup, secured $3.3 million in Pre-Series A fundingwhile Gamepoint raised nearly $771,000. These investments highlight the continued evolution of location-driven consumer services in India’s urban markets.

Deeptech, Robotics, And Hardware Startups Make Steady Progress

India’s deeptech and hardware ecosystem continued to build momentum, albeit with smaller ticket sizes. Varahaa climate-tech startup focused on carbon removal solutions, secured $20 million as part of its Series B roundled by WestBridge Capital.

Meanwhile, startups such as EyeROV (maritime robotics), Octobotics (robotics automation), Digital Striker (IoT hardware), and Sanyark Space (spacetech) collectively secured early-stage investments, signalling sustained investor interest in advanced technology solutions.

Seed Stage Funding Shows Signs Of Slowdown

Despite the overall rise in funding activity, investments at the seed stage witnessed a decline. Only three seed-stage startups raised $7.8 millionmarking a 40% drop from $12.9 million raised during the previous week. This suggests investors remain selective, prioritising startups with stronger product-market fit and clearer revenue visibility.

New Venture Funds Strengthen Deeptech Focus

The week also saw significant developments in venture capital funding. US-based Golden Sparrow Ventures announced the first close of its $20 million Fund IIwhich aims to back approximately 22 Indian deeptech startups.

Additionally, Unicorn India Ventures closed its third fund at INR 1,200 croresurpassing its initial target. The firm also partnered with IIT Madras to launch a dedicated ₹600 crore deeptech-focused fundreflecting the growing strategic importance of advanced technologies.

M&A And IPO Activity Adds To Ecosystem Buzz

The week also witnessed notable mergers and acquisitions. Gaming startup Zupee acquired microdrama platform Vertical TV to strengthen its short-video offering, while FMCG giant Marico acquired a 60% stake in plant-based nutrition startup Cosmix Wellness for INR 225.6 crore. HORIBA India also expanded its deeptech presence by acquiring Pristine Deeptech.

On the public markets front, NBFC Aye Finance filed its red herring prospectus for a ₹1,010 crore IPOwhile Fractal Analytics announced its IPO price band. Meanwhile, SEBI cleared IPO proposals of fintech player InCred Holdings and deeptech startup SEDMAC.

A Measured But Positive Outlook

While funding levels remain below peak startup investment cycles, the steady increase in deal activity, combined with growing investor interest in ecommerce, AI, and deeptech, signals a cautiously optimistic outlook for India’s startup ecosystem. With supportive policy measures and expanding investor participation, the coming months could witness further strengthening of funding momentum.