India’s startup ecosystem recorded a power-packed week featuring major policy reforms, funding moves, regulatory updates, product launches, and significant milestones. From a new $75 million AI-focused venture capital fund to the government rolling back mandates, easing compliance norms, and cracking down on illegal lending apps — here’s everything that shaped the innovation landscape this week.
Top Startup News
1. Ex-Haptik CEO Launches $75 Million AI-Focused VC Fund ‘Activate’
India’s AI investment momentum received a major boost with the launch of Activate, a new AI-focused venture capital fund backed by Aakrit Vaish (former CEO of Haptik and advisor to the India AI Mission) and ex-Together Fund partner Pratyush Choudhary.
With a corpus of $75 million, the fund aims to support early-stage AI-native startups, spanning application-layer tools, foundational models, physical infrastructure, robotics, and other deep-tech segments. The launch underscores India’s accelerating ambition to scale AI innovation in both consumer and enterprise domains.
2. Centre Withdraws Mandatory Sanchar Saathi App Requirement
In an important regulatory reversal, the government has revoked the mandatory pre-installation of the Sanchar Saathi safety app on new smartphones.
The app — already downloaded by 1.4 crore users — helps track lost or stolen devices, block fake IMEI numbers, and combat cyber fraud. The original plan to make Sanchar Saathi a locked, non-removable system app was met with industry concerns, leading the Centre to withdraw the mandate.
3. Revised ‘Small Company’ Definition Brings Major Relief for Startups
The Ministry of Corporate Affairs has expanded the definition of a ‘small company,’ significantly reducing compliance hurdles for early-stage startups.
New thresholds include:
This doubles the previous limits of ₹4 crore and ₹40 crore set in 2022. The revision is expected to benefit thousands of startups by easing reporting requirements, lowering compliance costs, and providing operational flexibility.
4. Govt Reveals Zero Applications Under E4W Manufacturing Scheme
In a surprising update, the government announced that no automaker has applied under the Electric Four-Wheeler (E4W) manufacturing scheme.
Industry players cited multiple hurdles, including:
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Rare earth supply constraints
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Uncertainty around India–EU FTA negotiations
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High investment thresholds
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Tight timelines for achieving domestic value addition
The SPMEPCI scheme would have allowed global automakers to import EVs at lower duty if they committed to investing ₹4,150 crore in India — but the absence of applications indicates a disconnect between policy expectations and industry readiness.
5. Bharat Taxi, India’s State-Backed Ride-Hailing App, Launches Next Month
India is preparing to launch its own government-backed ride-hailing service, Bharat Taxi, next month.
Home Minister Amit Shah announced that the platform aims to reduce drivers’ dependence on private aggregators. Key features include:
The service has already undergone pilots at Delhi International Airport and in Rajkot, marking the government’s push to strengthen competition in the mobility sector.
6. India Approaches 2 Lakh DPIIT-Recognised Startups
India’s startup base continues to expand, with the country now home to 1.97 lakh DPIIT-recognised startups, according to data presented in Parliament.
The ecosystem has created 21.11 lakh direct jobs, reaffirming India’s position as the world’s third-largest startup economy.
Maharashtra leads with 34,444 startups, contributing over 3.76 lakh jobs.
The government also disclosed that 6,385 startups have been dissolved — reflecting natural churn as the ecosystem matures.
7. Swiggy Experiments with Social Commerce via ‘Bites’
Swiggy is bringing a social layer to its dining business with the rollout of Bites, a short-form video feed integrated into its Dineout platform.
The reels-style feature showcases restaurants through snackable clips, enhancing discovery and boosting the Dineout brand. Bites is currently live in Delhi NCR, Mumbai, and Bengaluru, with plans for wider expansion.
8. Razorpay Secures RBI Licence for Cross-Border Payment Aggregation
Fintech leader Razorpay has received a crucial RBI approval to operate as a cross-border payment aggregator, enabling it to facilitate both inward and outward remittances for Indian businesses.
The licence further strengthens Razorpay’s global roadmap, following recent integrations with Apple Pay, support for zero-forex-markup payments for Amazon Global Sellers, and a partnership with NPCI International to expand UPI acceptance in Malaysia.
9. Wakefit Finalises IPO Price Band at ₹185–195
Home and sleep-solutions brand Wakefit has set its IPO price band at ₹185–195 per share.
At the upper end, the valuation stands at ₹6,373 crore (~$710 million).
The total issue size is ₹1,289 crore, and the company has previously raised over $148 million from investors such as Peak XV, Verlinvest, Investcorp, and SIG.
Wakefit’s IPO marks another strong consumer-tech entry into India’s public markets.
10. Govt Blocks 87 Illegal Lending Apps in Major Crackdown
In a decisive move, the government blocked 87 illegal digital lending apps under Section 69A of the IT Act.
Many of these platforms were linked to Chinese entities and were accused of charging exorbitant interest rates, deploying aggressive recovery tactics, and engaging in unlawful business conduct.
Investigations under the Companies Act are ongoing, with more enforcement expected.
From policy shifts and compliance reforms to new funds, fintech advances, and IPO activity, this week showcased the breadth and velocity of India’s startup ecosystem. As emerging opportunities intersect with regulatory action and capital flows, the landscape continues to evolve at a rapid pace.
