Hyderabad Startup Funding Soars In H1 2026, Delhi, Mumbai Funding Dips

In H1 2026, Hyderabad saw 45% YoY increase in funding value, more than Bengaluru (8% increase) or Chennai (26% growth)

Meanwhile, startups based in Delhi NCR raised 39% less funding compared to the same period last year, while Mumbai-based startups saw a 31% decline

Investors say this ties into the broader trend of decentralisation in India’s startup ecosystem driven by AI, remote work, and rising cost of living in metro cities

Although the top startup hubs — Bengaluru, Delhi NCR and Mumbai — continued to maintain their lead in funding trends, investment activity significantly picked up beyond the aforementioned startup hubs.

As per Inc42’s’ Indian Tech Startup Funding Report, H1 2026, Hyderabad recorded the highest year-on-year surge in funds deployed during the half among India’s top startup hubs.

Hyderabad-based startups raised over $226 Mn in the first six months of 2026, representing a 45% YoY increase in funding. Deal activity in Telangana’s capital also surged by 83% YoY to 22 deals.

The uptick came primarily at the behest of Hyderabad-based spacetech startup Skyroot Aerospace raising $60 Mn at a $1.1 Bn valuation. Besides, the likes of Dhruva Space, Recykal, and Liquidnitro Games were other Hyderabad-based startups that landed notable funding rounds in the period.

In terms of year on year growth, this is the highest among the top five hubs – Bengaluru, Delhi NCR, Mumbai and Chennai.

Trailing Hyderabad in terms of YoY growth, Chennai funding rose 26% YoY to over $87 Mn. However, its deal count fell by 28% to 13 deals.

Meanwhile, Bengaluru remained India’s most well-funded startup hub, attracting over $2.7 Bn across 165 deals. This marked an 8% increase in funding value and a 15% growth in deal count YoY.

Beyond Bengaluru, which has long been hailed as India’s startup capital, the other two tier I startup hubs witnessed a contraction in capital deployed during the half. While funding in the financial capital fell 31% YoY to over $587 Mn across 60 deals, funding in Delhi NCR fell by 39% YoY to just over $917 Mn. This is despite a 16% increase in deal count to 134 deals.

Zooming out, Indian startups raised over $5.2 Bn cumulatively across 501 deals in H1 2026. While the total funding value has dropped 9% YoY, the number of deals struck during the period grew by 7%.

With that, here’s a look at how top startup hubs performed during the half.

While Bengaluru and Delhi NCR continue to dominate India’s startup funding landscape in absolute terms, Hyderabad emerged as the fastest-growing ecosystem on a year-on-year basis. Does this signal a long-term shift or is it a flash-in-the-pan moment?

Investors believe that this doesn’t necessarily mean that traditional startup hubs are falling behind. Bengaluru and Delhi NCR house India’s most mature startup ecosystems, netting the highest portion of cheques over the years. As a result, these ecosystems have always operated with a higher comparative funding base.