Neysa funding lifts VC funding for Indian startups in February
February saw 110% yearly increase in venture capital inflow into Indian startups and this was primarily due to Neysa's $600 million funding round.
Neysa’s $600 million fundraise lifted the overall venture capital inflow into the Indian startup ecosystem in February.
The total VC funding for the month of February 2026 stood at $1.4 billion, which was a 110% increase when compared to February 2025 where the amount was $669 million, per data from YourStory Research. Compared to January 2026, the increase in funding was 52%, where the fund raised was $927 million.
This data actually presents a mixed picture of the Indian startup ecosystem from an VC funding point of view. If not for the Neysa transaction, the total funding raised would have been around the $800-900 million range, which could be termed as relatively average performance. It actually shows that there has not been any pickup in the overall funding momentum.
In fact, during the month of February there were no $100 million plus deals outside of Neysa. The high value transactions for the month were: Drivn ($80 million), IDfy ($53 million), Temple ($54 million), and The Whole Truth ($51 million).
These developments show that VC funding into Indian startups will continue to remain restricted for at least in the first half of the year given the macroeconomic environment. The latest tension in the Middle East is likely going to negatively affect the funding ecosystem.
The positive in February is that the number of deals has been above 100 and this is a good sign that entrepreneurial activity still remains strong.
On the other hand, the broad funding trends continued even in the month of February where the early stage funding category showed the highest activity in terms of deals but the funding amount remains always lower when compared to the other stages of funding.
The growth stage of funding garnered the highest amount of funding for the month followed by early and then late. The debt category was at just $83 million in the month of February.
As for sectors, AI led the pack, followed by cleantech and Direct-to-Home or D2C. Surprisingly, the fintech segment, which usually sits on top, was in fourth position in February.
Mumbai topped the list of funding inflow followed by Bengaluru and then Delhi-NCR. This has been the dominant pattern for the Indian startup ecosystem where the three cities corner more than 90% of the funding. The other cities in the country like Chennai, Hyderabad, Pune have unfortunately not been matched up to the level of these three cities.
Overall, the Indian startup ecosystem struggles to raise capital, with AI being the only bright spot. Industry watchers expect more AI startups will emerge in the country that could attract investor money.