Tech Sector Sees More Capital With Fewer Deals In 9M 2026

Tech Sector Sees More Capital With Fewer Deals In 9M 2026

Funding rose despite a 38 per cent drop in deal volume, with AI infrastructure, enterprise technology and fintech drawing larger rounds

Technology companies raised USD 10.3 billion in the first nine months of 2026, up 7 per cent from a year earlier, even as the number of funding deals and first-time funded startups fell sharply.

The funding was spread across 1,134 rounds between January 1 and September 21, down 38 per cent from 1,838 rounds in the same period last year. The data points to a concentration of capital in a smaller pool of companies and larger transactions, with investors favouring businesses with established traction, as per Tracxn report.

There were 18 funding rounds of USD 100 million or more during the period. Nxtra's USD 1 billion private-equity round for data-centre expansion was the largest, followed by Neysa's USD 600 million Series B and CRED's USD 540 million Series H.

Enterprise Applications, Enterprise Infrastructure and FinTech were the largest sectoral recipients of capital. Enterprise Infrastructure recorded the fastest growth, with funding jumping 436 per cent to USD 1.6 billion from USD 292 million a year earlier.

Enterprise Applications funding rose 49 per cent to USD 3.5 billion, while FinTech funding increased 13 per cent to USD 2.2 billion.

AI Infrastructure emerged as the largest individual business segment, attracting USD 1.2 billion, followed by Digital Lending at USD 799 million and Payments at USD 773 million.

The decline in deal activity was most pronounced at the early end of the startup funding cycle. Seed funding fell 37 per cent to USD 698 million, while the number of first-time funded companies dropped 30 per cent to 338.

At the same time, early-stage funding rose 27 per cent to USD 4.2 billion and late-stage funding remained broadly stable at USD 5.4 billion. Series A and later rounds fell 23 per cent to 409.

India added six new unicorns in the first nine months of 2026, up from four in the comparable period last year.

The companies reaching unicorn status also did so with less capital. New unicorns had raised an average USD 101 million before their unicorn round, compared with USD 205 million in 9M 2025.

The average time taken to reach a valuation of USD 1 billion from Series A also fell to 4.9 years from 6.6 years, suggesting that companies reaching unicorn status are scaling with less capital and in a shorter period.

IPOs Steady, Acquisitions Decline

The echnology sector recorded 29 IPOs during the period, unchanged from each of the previous two years, while acquisitions fell 31 per cent to 91 from 131.

Fractal Analytics led the technology IPOs with a market capitalisation of USD 1.7 billion, followed by Molbio Diagnostics at USD 973 million and Amagi at USD 858 million. Shiprocket also went public during the period.

The average time between a company's first funding and an IPO declined to 8.5 years from 13.7 years a year earlier, while the average period to an acquisition fell to 6.9 years from 14.7 years.

Innovist's USD 434 million sale to L'Oréal was the largest acquisition during the period, followed by Adani Energy Solutions' USD 319 million purchase of IntelliSmart and UpGrad's USD 218 million acquisition of Unacademy.

Bengaluru remained the largest technology funding hub, accounting for 43 per cent of India's total technology funding at USD 4.4 billion, compared with a 38 per cent share a year earlier.

Mumbai was second with USD 1.8 billion, or 18 per cent, followed by Gurugram at USD 1.6 billion. Gurugram's share doubled to 16 per cent from 8 per cent a year earlier, largely because of Nxtra's USD 1 billion funding round.

Noida attracted USD 660 million, while Delhi received USD 446 million. Delhi's share dropped to 4 per cent from 15 per cent in the year-earlier period.

In Bengaluru, CRED, Rapido and Sarvam were the three largest recipients of funding during the period, raising USD 540 million, USD 240 million and USD 234 million, respectively.

Overall, the data shows a technology funding market in which aggregate capital has recovered despite a substantial contraction in deal activity, with infrastructure, AI and established technology businesses accounting for an increasing share of investor capital.