India, Oct. 9 -- AI emerged as the defining theme in the Indian startup ecosystem in the July-September quarter, with startups in the segment raising their highest-ever-recorded quarterly funding.

According to Inc42's Indian Tech Startup Funding Report Q3 2026, AI startup funding surged 265% year-on-year to $438 Mn. The number of deals rose 35% to 35 from 26 in Q3 2025. The momentum builds on a strong first half of the year.

Indian AI startups raised $676 Mn across 57 deals in H1 2026, more than four times the $162 Mn raised in the corresponding period last year. With another $438 Mn raised in Q3, the sector's funding for the first nine months of 2026 stood at $1.1 Bn+.

The surge stands out against a relatively subdued funding environm...