India’s startup ecosystem had a strong first half of 2026, raising nearly $7.4 billion in funding. However, the number of investment deals dropped sharply compared to last year. The biggest reason behind the funding jump was Meta’s $900 million investment in fintech startup CRED, which became one of the largest startup deals of the year.
The investment has done more than increase funding numbers. It has also brought major leadership changes at CRED, raised questions about data privacy, and highlighted how investors are now focusing more on profitable and well-established startups instead of early-stage companies.
Experts say the first six months of 2026 show that investors are becoming more careful with their money. Rather than funding a large number of startups, they are putting bigger amounts into companies that already have strong business models and steady growth.
Meta Invests $900 Million in CRED, Kunal Shah Joins WhatsApp
Meta has invested $900 million (around ₹8,550 crore) in Bengaluru-based CRED. The funding values the company at $4.5 billion after the investment. The deal includes fresh funding as well as the purchase of shares from existing investors, giving Meta an estimated 20% minority stake in the company.
Although CRED’s valuation has increased from $3.5 billion in 2025, it is still below its highest valuation of $6.4 billion in 2022. The funding round has also triggered the company’s fifth Employee Stock Ownership Plan (ESOP) buyback, allowing employees to sell some of their shares.
The investment also marks a major leadership change. CRED founder Kunal Shah is stepping down as the company’s operating CEO and joining Meta as the Head of WhatsApp. He will replace Will Cathcart, who led WhatsApp for seven years and is moving to another role within Meta focused on artificial intelligence and future products.
CRED has named Miten Sampat, who has handled strategy and finance since 2020, as its interim CEO while the company prepares for its next phase of growth and works towards a future IPO.
Founded in 2018, CRED now has around 17 million monthly active users and handles more than 40% of India’s credit card bill payments. The company also manages lending assets worth over ₹24,000 crore. In FY25, CRED reported operating revenue of ₹2,735 crore, while its operating losses dropped by more than 50%, showing improvements in its financial performance.
For Meta, bringing Kunal Shah on board is part of its plan to grow WhatsApp’s business in India. India is WhatsApp’s biggest market with more than 500 million users, but WhatsApp Pay still has a very small share of the country’s UPI payments compared to leaders like PhonePe and Google Pay.
Bigger Funding, But Fewer Startup Deals
While India’s startup funding increased in the first half of 2026, the number of funding rounds fell by around 43% compared to the same period last year.
A large share of the money came from just a few big investments. Meta’s funding in CRED, along with major investments in Nxtra and Neysa, made up nearly 31% of all startup funding during the six-month period.
Most of the investment went to late-stage startups, which together raised around $3.8 billion. At the same time, fewer new startups managed to secure their first round of funding, showing that raising money has become harder for early-stage founders.
Even with this slowdown, India added several new unicorns in H1 2026. Companies such as Square Yards, Sarvam AI, Skyroot, KreditBee, Neysa, and Juspay crossed the $1 billion valuation mark, taking the country’s total unicorn count to more than 130.
The startup ecosystem also saw several mergers and acquisitions during the period, especially in consumer brands and healthcare. At the same time, many companies cut jobs to improve efficiency, with more than 3,600 employees affected across different startups.
IPO Activity Rises as Early-Stage Funding Slows
The first half of 2026 also saw strong activity in the IPO market. Several technology companies, including Turtlemint, Fractal, Shadowfax, and Kissht, went public and together raised more than ₹41,000 crore.
However, early-stage funding has become more difficult because of new rules for Angel Funds. Under the updated regulations, only Accredited Investors who meet higher financial requirements can invest in these funds. This has reduced the number of investors available for young startups.
To support new businesses, the government has launched a ₹10,000 crore Fund of Funds for Startups (FFS 2.0). The scheme aims to support deep-tech startups, advanced manufacturing, and companies from Tier-2 and Tier-3 cities.
Meta’s investment in CRED has also started a wider discussion in the startup industry. Some experts believe the deal is a new way for global technology companies to bring talented founders into their organisations without fully acquiring the company. Others have raised concerns about data privacy and India’s financial data. However, both Meta and CRED have said that Meta will not get access to CRED’s customer data or have control over the company’s decisions.
Overall, the first half of 2026 shows that India’s startup ecosystem continues to attract global investors. At the same time, the market is becoming more selective, with investors giving more importance to sustainable growth, better governance, and strong financial performance.