07 - 05 - 2026

Karnataka tech startups raise $868 million in Q1 through 117 rounds

By Our Bureau
Mumbai, May 7, 2026

Karnataka’s tech startups raised $868 million through 117 funding rounds in the first quarter of 2026, with Bengaluru capturing 98% of funding at $848 million, according to a report by data intelligence platform Tracxn Technologies Ltd.

The top funding rounds of the period were led by Zetwerk’s $53 million Series F, backed by Pantomath Group, followed by Ultrahuman’s $48 million Series C and Cult.fit’s $47 million Series G backed by Temasek.

Porter rounded out the top four with a $47 million Series F from Wellington and Kedaara. All four of the largest rounds went to companies founded before 2020, a testimony that mature businesses continue to scale rather than new entrants breaking through.

The top business model by capital deployed was On-Demand Manufacturing Services ($52.8 million), with DTC Fitness Tracker Brands ($48 million) and Employee Healthcare Services ($47 million) close behind.

The number of funding rounds fell 38% to 117 from 188, but investors wrote larger cheques, signalling conviction at earlier stages.

“Seed stage funding reached $137 million, up 51% from the previous quarter,” Tracxn said, even as late-stage capital plunged 43% to $317 million.

A cluster of Series A rounds between $13 million and $30 million reflected broad early-stage deployment across sectors including fintech (Juspay, Stable Money, Olyv), B2B payments (XFlow), aerospace (Bellatrix Aerospace), and AI infrastructure (Portkey, Nurix). The Fitness & Wellness Tech feed attracted $97.1 million in total — the highest of any thematic feed — while Employee Health IT drew $67.5 million and Payments $61.1 million, underscoring the continued institutional interest in health and financial infrastructure plays.

Soonicorn Club

Despite the slowdown, two firms – Supertails and Assiduus – joined Karnataka’s “Soonicorn Club”, bringing the tally to 120.

Enterprise Applications led sectoral funding with $331 million, followed by Retail at $275 million and FinTech at $152 million. Retail’s 130% surge was the sharpest swing of the quarter, driven by renewed appetite for consumer commerce platforms.

Three companies – Amagi, Shadowfax and e2E Rail – got listed in January, compressing what is usually a spread-out exit window, Tracxn said, adding that the cluster of IPOs did not necessarily reflect a broad reopening of public markets.

Bengaluru remained the state’s tech capital, capturing 98% of funding at $848 million. Tiptur accounted for the remaining 2%, entirely from Akshayakalpa’s $19.3 million Series D.

On exits, six acquisitions were recorded, down from 20 a year earlier. Marico’s $24.9 million purchase of Cosmix was the only deal with a disclosed value. Edtech consolidation continued with upGrad acquiring Unacademy.

Tracxn tracks over 7.5 million entities globally and publishes quarterly reports on India’s regional startup ecosystems.