Bengaluru: Technology companies based in Karnataka raised $4.6 billion in the first nine months of 2026, a 26 percent increase from the $3.7 billion raised during the corresponding period last year, according to data from Tracxn. Fintech company CRED’s $540 million Series H funding round in June alone accounted for nearly 12 percent of the total.
Despite the increase, funding remains below its previous peak and amounts to 30 percent of the $15.4 billion secured during the same period in 2021 amid the second wave of the Covid-19 pandemic.
The latest figures also point to a widening gap between late-stage companies and early-stage startups. While larger companies continued to attract substantial investments, the number of startups receiving funding for the first time fell sharply.
Only 86 companies secured their first funding in the first nine months of 2026, a 45 percent decline from 155 during the corresponding period last year. The total number of funding rounds also dropped 35 percent, from 610 to 397, according to Tracxn’s Karnataka Tech report for the first nine months of the calendar year.
The increase in overall funding was largely driven by late-stage investments, which rose 32 percent to $2.7 billion from $2 billion during the same period last year. Early-stage funding also increased 35 percent to $1.7 billion, while seed-stage funding declined.
“Most of the capital went to late-stage companies. Early-stage funding also rose, while seed-stage funding fell. Fintech, enterprise applications and auto tech emerged as the top-funded sectors, with Bengaluru accounting for nearly all the funding raised,” the Tracxn report said.
However, the higher value of late-stage investments did not translate into more deals. The number of late-stage funding rounds fell to 36 in the first nine months of 2026, from 44 during the corresponding period last year.
CRED’s $540 million Series H round was the largest late-stage investment during the period, followed by Rapido’s $240 million Series F and KreditBee’s $220 million Series E rounds.
Among early-stage companies, Sarvam attracted the largest investment, raising $255 million in a Series B round in June, followed by another $90 million in August.
CRED’s funding round helped fintech and enterprise applications emerge as the leading sectors, raising $1.4 billion each during the first nine months of 2026. This represented increases of 44 percent and 37 percent, respectively, compared with the corresponding period last year.
Auto tech companies raised $896 million, more than five times the $172 million secured during the first nine months of 2025.
Most of the investments went to Bengaluru-based companies. Three startups based in the city—Emergent, Sarvam and KreditBee—joined the unicorn club, according to Tracxn.
While funding increased, the number of acquisitions involving Karnataka-based companies nearly halved to 20 in the first nine months of 2026, compared with 39 during the corresponding period last year.
Unacademy’s $222 million acquisition by upGrad in May was the largest disclosed deal, accounting for around 80 percent of the $276 million reported across five acquisitions with disclosed transaction values. Other notable deals included Marico’s $25 million acquisition of Cosmix and Meesho’s $21 million acquisition of Kirana Club.
(Edited by Chingkheinganbi Mayengbam)