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Indian startups experienced a funding surge in February 2026, raising approximately $2 billion across 134 deals, driven largely by a massive $1.2 billion round for Neysa, combining equity and debt financing. No other transaction exceeded $100 million during the month, highlighting a concentration of capital in high-impact, large-scale deals.

Total funding surged compared to January’s $930 million and December’s $870 million. On a year-over-year basis, funding rebounded from $803 million in February 2025, while the number of deals increased from 98 to 134.

Growth-stage and late-stage rounds dominated the investment landscape, securing $1.6 billion across 17 deals. Early-stage companies raised around $405 million through 100 transactions. Apart from Neysa, top deals included Drivn ($80 million), IDfy ($53 million), and consumer-focused startups like The Whole Truth ($51 million) and Supertails ($30 million).

In early-stage funding, Temple led with a $54 million seed round backed by 94 investors, making it one of the largest seed deals recently, followed by Showroom B2B ($17 million) and Xflow ($16.6 million).

Strong M&A Activity
February also saw robust acquisition activity. Bertelsmann acquired 80% of LetsTransport, while Rainmatter and USV took majority stakes in PensionBox and Nutritional Lab, respectively. Marico purchased 60% of Cosmix, upGrad acquired Internshala, and BillDesk moved to acquire Worldline SA.

Mumbai emerged as the primary hub for funding, raising $1.33 billion across nine deals—about 66% of the total. Bengaluru led in deal count with 61 deals totaling $304 million, followed by Delhi-NCR with 40 deals worth $286.5 million.

Sector-wise, AI dominated funding with 22 deals totaling $1.28 billion, accounting for roughly 64% of monthly investments, underscoring investor focus on this space, particularly mega-deals like Neysa. E-commerce and fintech followed in deal value and volume.

The market also witnessed IPOs from Fractal and Aye Finance, albeit with limited response, while CoinDCX and Unacademy executed employee share buybacks. Livspace announced layoffs exceeding 1,000 employees as part of restructuring toward an AI-driven model, alongside departures of several senior executives.

Overall, February reflected a dual narrative in the Indian startup ecosystem: mega-deals pushed funding to record highs, while broader capital distribution remained selective. Investments continued to focus on expansion-ready startups and high-conviction sectors, with AI leading the charge and a strong preference for large, growth-stage companies.