One fourth startups in India is now an AI company: Tracxn Report 2026

AI has emerged as the leading sector in which one in four operator-led startups founded in 2025 developing AI. In the second edition of ‘The State of Operator-Led Startups’ released by RTP Global in collaboration with Tracxn. Their findings point to a broader shift underway in India’s startup ecosystem, where experienced operators are increasingly choosing entrepreneurship to build the next generation of AI-native companies.

According to the report, 189 operator-founded technology startups were established between 2023 and 2025, tracking down the evolving cohort in a selective funding environment.

It says that Out of the 189 startups, 51 are AI companies. Vertical AI leads within that cohort, out of which 30 build domain specific solutions and the rest focus on Horizontal AI, Developer Tools & AI, Infrastructure, Consumer AI, Agentic AI, and Enterprise AI.

The report highlights that the trend is closely linked to the changing economics of company building. As the product development timelines and experimentation cost is reduced with AI. Also, combining domain knowledge with AI to build products around problems has become an easy task for founders with operational experience.

Beyond sector preferences, the report points to continued investor confidence in this cohort.

Funding for operator-led startups raised from USD11.1 million to USD 131.7 million from 2023 until 2025. Seed-stage funding is still rising from USD 4.3 million to USD 75.2 million While USD 1mn rounds closed by operator-led startups rose from 2 to 21, in 2025 it rebounded by 35%.

Between 2023 and 2025, operator-led startups’ average seed round stood at USD 2.4 million, 1.7x higher than the USD 1.4 million average for the rest of India tech startups. At Series A, operator-led startups raised an average of USD 10.5 million, 1.25x higher than the USD 8.4 million average for the rest of India tech startup ecosystem.

Series A outcomes strengthened in this edition. The average Series A valuation for operator-led startups reached USD 53.3 million, up from the USD 38.5 million average recorded in the inaugural edition.

Operator-led startups have raised approximately USD 186 million between 2023-25. Whereas Fintech & Insurtech, Retail Tech & E-Commerce, and Transportation & Mobility emerged as the three largest sectors by funding, while AI Solutions, Fintech & Insurtech and Enterprise Solutions & Software were the three largest sectors by startup creation.

Commenting on the findings, Nishit Garg, Partner, Asia Investment Team, RTP Global, comments: “As RTP Global completes 15 years of investing in India, this research validates something we’ve observed for years. Operator-founders bring a distinct company-building muscle shaped by experience, scaling teams, navigating constraints and executing through multiple phases of growth. As AI fundamentally changes how products are built, the qualities that operators bring of pragmatism, execution focus and capital discipline become even more valuable. While this report highlights the growing momentum of operator-founders, our philosophy remains unchanged: we back exceptional founders, regardless of where they come from.”

Neha Singh, Co-founder and CEO, Tracxn, added: “India’s founder landscape has evolved significantly over the past decade. A new generation of operator-founders has emerged: professionals who spent years contributing to and growing businesses and are now building their own. Experience has moved from being a soft signal to a genuine differentiator and in a selective climate, that experience carries real weight with investors. That, in turn, helps strengthen the foundations of the startup ecosystem. It is also how an ecosystem renews itself, with each generation of companies training the next. This report looks closely at that cohort and at what it signals for the next chapter of Indian entrepreneurship.”

The findings reinforce that India’s startup ecosystem is evolving from experimentation to execution. As AI lowers barriers to innovation and experienced operators launch new ventures, the ecosystem is poised for stronger, more sustainable growth backed by increasing investor confidence.