Q3 Funding Crawls Up, Inc42’s CTO Summit 2026 & More

Startup Funding Up A Mere 5% YoY In Q3

Startup investors turned more selective in Q3 2026. While funding rose 5% YoY to $2.2 Bn in the quarter under review, deal count declined 13% YoY to 210. Beyond the headline numbers, India minted two new unicorns, while AI and cleantech sectors topped funding charts. 

Growth Stage Mania: Venture deployment skewed heavily toward Series A and B rounds, where capital surged 38% YoY to $1.1 Bn. Conversely, late stage funding fell 10% YoY to $994 Mn as investors exercised greater caution. Meanwhile, early stage funding also declined in Q3, but median cheque size improved, showing that investors continue to back fewer but stronger seed bets.

AI On The Rise: AI emerged as the most funded sector, attracting $438 Mn in Q3, up 265% YoY, led by multiple big-ticket rounds. Yet most investors surveyed by Inc42 believe that AI valuations remain elevated and frothy. Next to AI was cleantech, which raked in $433 Mn. On similar lines, deeptech funding also climbed 176% YoY to $290 Mn in the quarter.

Shockingly, traditional sectors lagged: fintech fell 11% YoY to $249 Mn and ecommerce dropped 31% YoY to $245 Mn.

Bengaluru Widens Lead: The startup hub cemented its dominance, raising $1.4 Bn+ across 80 deals. Bengaluru also captured 65% of the deeptech capital. Delhi NCR followed with $301 Mn and Mumbai with $223 Mn. Over half of surveyed investors see Bengaluru as best positioned to lead India’s deeptech ecosystem by 2030, ahead of Chennai and Hyderabad.

Investor Exits Multiply: M&A activity rose sharply during the quarter to 22 deals. On top of this, six new-age tech firms listed in Q3, enabling lucrative exits for KKR, Accel, 500 Global and Tribe Capital. As a result, 72% of the surveyed investors hold IPO-ready late-stage companies, with 38% also favouring secondary buyouts for liquidity. 

With funding selective but exits improving, here is how India’s startup funding landscape entered a more mature phase in Q3 2026…

From The Editor’s Desk

Inc42’s CTO Summit 2026

• Inc42’s inaugural CTO Summit 2026 brought together India’s biggest technology leaders to examine how AI is reshaping commerce, engineering and products. The CTOs stressed that strong systems and human oversight remain essential for building reliably at scale.
• Engineering leaders underscored the need for precise access rules and high-quality data for AI applications. Without these foundations, they believe that an agent may respond quickly but rely on stale, duplicated or unauthorised information.
• The executives also said that AI products in India must work on budget smartphones, patchy networks and multiple languages. Meanwhile, as AI-generated code rises, CTOs suggest building meaningful KPIs to prove that teams are delivering better products. 

Simple Energy’s Mega Round

• The electric vehicle (EV) maker has raised ₹1,750 Cr in its Series C round from a clutch of family offices and angel investors to ramp up manufacturing, distribution, supply chain, R&D and hiring. Including the current round, it has raised $264 Mn to date.
• Founded in 2019, Simple Energy sells a range of high-performance and affordable electric two-wheelers. The startup currently operates 80 sales outlets across 60 Indian cities and commands a production capacity of 10,000 units per month.
• The fundraise comes amid intensifying competition in the E2W space. While half of the market is still dominated by legacy giants like TVS Motors and Bajaj Auto, investors also continue to be bullish on new-age OEMs such as Ather, River and Ultraviolette.

IRDAI Comes Under Fire

• In a letter to the regulator, Coverfox’s founder Sanjib Jha has argued that the proposed 2% remuneration cap for loan-linked insurance products could make it difficult for lenders to continue distributing insurance to rural and low-income borrowers. 
• Jha has called for a “priority sector insurance” framework to expand coverage among underserved customers based on geography, income and product. He also suggested enabling established distributors to become insurers to improve last-mile distribution. 
• Last week, IRDAI released a consultation paper, which proposed commission ceilings and tighter expenses-of-management limits for insurers to make insurance distribution more transparent. The plan has seen a broader push back from the industry.

Moneyview’s D-Street Debut

• Shares of the fintech unicorn are all set to list on the exchanges today. The public offer comprises a fresh issue of shares worth ₹750 Cr and an OFS of about 10.05 Cr shares. At ₹34 per share, the IPO valued the company at ₹5,985 Cr.
• The IPO has unlocked sizeable gains for Moneyview’s early backers. Ribbit Capital has fetched 11.85X on its initial investment, while Tiger Global has realised 3.42X return on shares sold through the offer for sale.
• Moneyview cofounders Puneet Agarwal and Sanjay Aggarwal also sold shares worth ₹46.06 Cr each. After the sale, Puneet still retains shares valued at ₹407.07 Cr at the issue price, while Sanjay owns shares worth ₹494.55 Cr.

Apple Pay Launches In India

• The OEM has finally rolled out its payment service in India. Apple Pay will initially support Visa and Mastercard credit cards issued by Axis Bank. 
• Apple Pay will enable iPhone, iPad and Apple Watch users to make online and in-store payments, with Mac support coming soon. The service is being rolled out in partnership with payment infrastructure players such as Juspay, Cashfree, PayU, among others.
• The launch marks the culmination of Apple’s nearly decade-long effort to bring its payments service to India. It first indicated plans to launch the service in the country in 2017, but the rollout subsequently ran into regulatory and technical hurdles.

Inc42 Markets

Inc42 Startup Spotlight

Can OneRx AI Help Doctors Keep Up With Medical Research?

Medical literature is expanding faster than clinical teams and doctors can search, assess and apply it at the point of care. OneRx is addressing this gap with an AI platform that turns journals and research into clinically-relevant insights.

AI For Doctors: Founded in 2025, OneRx is an AI platform for medical professionals and hospitals. Its system unifies peer-reviewed research, guidelines, trial findings and real-world evidence. The platform then summarises the information around a doctor’s specific question. Doctors can ask questions in plain language or by voice and receive answers with citations.

A Clinical Workflow: OneRx uses retrieval-augmented generation, which directs the AI to search a curated evidence layer rather than a generic chatbot answer. The platform’s initial focus remains on oncology. However, the startup positions itself as a support system, while the final clinical decisions remain with the treating doctor and institution.

An Emerging market: OneRx currently operates across Delhi NCR, Mumbai and Hyderabad. The platform claims that it is also used by oncologists across multiple countries. Operating in the broader AI-in-healthcare market, which is projected to become a $4.5 Bn opportunity by 2030, can OneRx earn doctors’ trust by making clinical evidence faster to access?

Infographic Of The Day

Zerodha’s investment arm, Rainmatter, has quietly built a portfolio across fintech, healthtech, climate, consumer and more. Here is all about Rainmatter’s top startup investments, sector by sector…

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