Early-stage startups have seen an increase in investments in value terms in this financial year, even as the broader funding markis muted and public markets are under pressure owing to heightened global uncertainties.
Investments in startups across seed to series B stages have increased 46% in value terms in 2025-26, till March 27, compared to the previous financial year, despite a decrease in deals to 129 from 192 during this period, according to data sourced from business intelligence platform Tracxn.
While seed and series A investments are technical terms for startups which are building the product and finding the market, a series B investment is done when startups start investing for growth in their business.
The value of funds invested in startups in seed or series A and B stages stood at $879 million in this fiscal till March 27, compared to $600 million in 2024-25.ET reported on March 23 that a handful of early-stage deals in wealth tech and artificial intelligence (AI) in financial services were getting stitched.
Wherever investors are noticing founders who are convinced of markets they are chasing, they are looking to invest higher cheque sizes,” said Dinesh Pai, who leads investments at Zerodha’s venture arm Rainmatter. “Additionally the availability of capital in this space has gone up with family offices, new emerging VCs and growth stage investors also doing early-stage rounds.”
Seed and angel deals in the fintech segment have fallen significantly in this fiscal. About $84 million has been invested in very early-stage companies in 2025-26, as per Tracxn data. The bulk of the fund infusions have taken place in subsequent rounds where the startups built a product and were looking to double down on customer acquisition and chasing scale.Investments in series A and B rounds have almost doubled to $794 million, compared to $417 million last year and $570 million in 2023-24.
“Early-stage deal making has started picking up as AI adoption in financial services is being evaluated by investors across the spectrum. Areas such as insurance distribution and wealth management are ripe for such innovation,” said Sunitha Viswanathan, partner at early-stage investment firm Kae Capital.
The average ticket size of investments in each of these companies has also gone up, the data showed. An analysis of the top 10 deals in the sector showed that $30-40 million was invested on average in early-stage startups this year, up from $20-25 million two years ago.Investors attribute this change to many startups raising back-to-back rounds on improved financials, as well as second-time founders starting fresh in the larger financial services segment.
“Average ticket size has increased especially with AI startups in the B2B (business-to-business) space looking to capitalise sufficiently and be globally competitive. With second-time founders now part of the mix, average cheque sizes have further gone up,” said Viswanathan of Kae Capital.
Large deals in this fiscal include consumer lending startup Snapmint ($125 million), green financing startup Ecofy ($42 million), Sarathi Finance ($41 million) and travel-focused fintech Scapia, which raised $40 million last year.“Some of the traditional non-banking lenders raised funding from venture capital firms in FY25 and FY26, which also resulted in the uptick in numbers. These companies were not typically on the VC (venture capitalist) radar till recently, but some of them have drawn VC attention in recent times,” a senior executive at a fintech startup said on condition of anonymity.
Chennai-based auto financing company Mahaveer Finance, for instance, raised about $21 million from Elevation Capital in June 2025.
A senior partner at a domestic venture firm pointed out that the focus has shifted to early-stage deals given the uncertainty around public markets. Investors are thinking carefully about risk-adjusted returns and hence reallocating money towards early-stage deals, he added.
“There is surely some uncertainty around the exit and IPO market, hence investors might prefer early-stages as timelines for these companies will be 8-10 years and that will help tide over the current volatility in the market to an extent,” Pai said.
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