At Startup Mahakumbh, 3,000 vied for funding—but few will make the cut | Company Business News

India’s biggest startup showcase just got bigger. But behind the buzz, founders are chasing attention, not just capital—and discovering that even ambition has limits.

At this year’s Startup Mahakumbh, more than 3,000 startups officially registered to pitch their ideas across 11 sectors. But the real number may be higher. Many aspiring founders opted not to sign up under the startup category, instead entering as general visitors—circulating through the halls in the hope of an impromptu pitch or a casual conversation with an investor.

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While the sectors on display ranged from AgriTech to D2C, it was clear that tech-led innovation dominated the narrative. Artificial intelligence, fintech, climate tech, and deep tech drew the largest crowds—and the bulk of investor attention.

The event, touted as one of the largest of its kind in India, served as a microcosm of the country’s entrepreneurial energy and growing policy focus on innovation.

But beneath the optimism lay a more sobering reality: tens of thousands of founders competing for increasingly limited investor interest, in an ecosystem where scale and survival are diverging paths. India’s startup scene is expanding fast—but not without growing pains.

“Throw a rock around here and you’ll hit a startup founder,” said a 31-year-old entrepreneur from Bangalore.

Yet many founders felt the event’s scale worked against the kind of focused networking they had hoped for.

“Last year, it was far less crowded—maybe around 1,000 to 1,500 startups,” said a Delhi-based founder. “This time, it’s overwhelming. You’re constantly chasing people, hoping for a conversation that might lead somewhere, but there’s no way to know if it’ll be worth it.”

“It would be more helpful if events like this happened more often, but with smaller, focused groups of startups,” said a Hyderabad-based founder. “With this kind of density, all you really get is an exchange of cards—not meaningful conversations with investors.”

Some founders chose to showcase their work at exhibitor pods; others found it easier to move around freely, hoping to strike up spontaneous conversations.

“With pods, you can get restricted, I personally feel. You have to stick to it or assign someone there. Like this, I can walk and talk, catching someone in the brief minutes of them leaving a venue or entering one,” said a startup founder, based out of Gujarat.

“Since AI is the supposedly next big thing, other startups—even promising ones—struggle to get the support we need,” says a handicrafts startup founder from Assam. They added that metro cities dominate the market with visibility, making it even harder for startups from smaller regions to gain traction.

Fewer bets, higher stakes

In the backdrop, the government has been signalling a stronger commitment to supporting deep tech ventures.

The Centre is reportedly considering a dedicated Fund of Funds for the sector in the upcoming Union Budget 2025. This follows the September 2024 launch of the BHASKAR portal, aimed at centralising support for startups and complementing the broader Startup India initiative.

As of now, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognised over 152,000 startups under the programme—though more than 5,000 have shut down, according to data shared in the Lok Sabha.

On the ground, founders continue to face significant challenges around funding and market readiness. The uncertainty is especially acute for SaaS startups.

Flipkart’s recent decision to shut down ANS Commerce, the D2C-focused SaaS platform it acquired in 2022, has rattled the ecosystem. The platform ceased operations by 31 March 2025, affecting over 200 employees—though severance packages and internal job opportunities have reportedly been offered.

The development underscores a growing sentiment: the path to profitability or acquisition is narrowing. For many founders, raising funds is no longer the primary goal—survival and strategic exits are becoming increasingly central to the startup journey.

“We got a pod last year too. Raising funds is tough, but we hope to meet someone willing to listen. We are a SaaS platform, but the industry is changing. Honestly, even acquisition also sounds good to me,” said a software-as-a-service (SaaS) platform startup founder based out of Hyderabad.

“Banks hesitate to take risks on us. Events like these at least put us in the same room as investors,” explained an ed-tech founder from Delhi.

Investors, too, are becoming more selective.

“Everyone here believes they are the next big thing—the disruptor. But out of 3,000, only one or two will be. That’s why we are here,” said an investor from a venture capital firm.

“Not everybody is doing something unique. Most platforms are identical to each other, we can understand who is worth investing in, in the first 30 seconds of their pitch,” said another investor.

Fatigue with fads

Pattern fatigue is setting in.

“After a while, trends start to repeat themselves. We’re less excited by what’s hot and more by what still matters five years from now,” said a partner at a multi-stage fund.

The sentiment found unexpected reinforcement during the event, when commerce and industry minister Piyush Goyal called on Indian startups to shift their focus beyond food delivery and gig economy models, urging a greater emphasis on deep tech. Drawing a pointed contrast with China, Goyal urged Indian entrepreneurs to “aim higher.”

Sharing an image he had once forwarded to a friend, Goyal remarked that many Indian startups still rely on converting unemployed youth into low-cost gig workers, while Chinese firms are building global tech muscle in areas like battery innovation and electric mobility.

He acknowledged India’s entrepreneurial vibrancy, but warned that the country must go beyond being known for producing “delivery boys and girls.”

He also took a swipe at the growing quick commerce boom, suggesting that capital is being misallocated toward hyper-fast logistics with limited long-term payoff.

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The comments sparked pushback online, including from Zepto chief executive Aadit Palicha. In a detailed response, Palicha defended the quick commerce model, noting that Zepto—just 3.5 years old—now employs 1.5 lakh Indians, has paid ₹1,000 crore in taxes, and attracted close to $1 billion in foreign direct investment (FDI).

Even so, players in the sector, including Zepto, remain under scrutiny. Retail industry bodies have raised concerns about potential FDI violations, adding another layer of uncertainty to the policy environment.

Deep tech, data, and doubts

While Goyal made a strong pitch for India to focus on long-horizon sectors, the ground reality for deep tech founders is far more complicated.

In 2024, deep tech startups in India saw funding surge 78% year-on-year to $1.6 billion, according to a NASSCOM report. Over 2,000 tech startups were launched in the same period. Yet, only about 1,000 of them fall under the deep tech category—a number Goyal described as “disturbing.”

His key message was clear: India must choose between “dukaandari” (shopkeeping) and becoming a “vishwavyaapi” (global tech leader). He also appealed to investors to rethink their approach and back technologies that could reshape India’s global standing.

But many investors offered a more tempered response.

“Deep tech is important, yes—but we can’t ignore the sectors that have already proven their ability to scale and create value quickly,” said one VC. “Quick commerce or SaaS may not sound glamorous, but they’ve built real businesses.”

Another said, “India needs both—the slow-burn deep tech bets and the fast-scaling consumer platforms. Each plays a different role in building a mature ecosystem.”

A third investor pointed out the risk of narrow framing, saying, “Policymakers need to be careful not to signal that certain models are somehow less worthy. Founders simply follow the market.”

Startups also point to longstanding structural constraints.

Friction with the finance ministry over the now-defunct angel tax had already stifled early-stage investment for years. While the tax was finally scrapped for all investor categories in Budget 2024, its chilling effect lingers.

“We’re a deep-tech startup, and like most in this space, we need at least three to five years of runway and significant funding to build anything meaningful,” said one founder. “There are plenty of small players working on chip design, IoT, robotics, and EV technologies—but without sustained capital and policy support, we’ll struggle to survive, let alone scale.”

Another challenge is data access. “We’re trying to innovate in AI, but let’s be clear—AI isn’t magic, it’s data,” said the founder of an AI startup. “The government holds some of the largest datasets in the country, yet they’re locked away from startups like us.”

He added: “If the government does release its data, who gets it? How? Under what framework? These are questions that need urgent answers if India wants to build serious AI products.”

Investors remain cautious.

“AI is the buzzword right now, so I’m not fully convinced until I see real integration. Just slapping ‘AI’ on a pitch deck doesn’t make a company defensible,” said one.

Another pointed to a common pattern: “We come across plenty of AI startups, but very few have access to proprietary data or novel applications. Most are just wrappers on top of existing technologies.”

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Zepto’s Palicha, too, acknowledged the structural limits. He noted that India lacks a foundational AI model, largely because the country never built dominant internet-era companies. Giants like Google, Facebook, Alibaba, and Tencent, he said, had access to enormous datasets, elite talent, and deep capital pools—enabling them to drive cutting-edge innovation in AI.

He cited Amazon as a case in point. What began as an e-commerce company eventually transformed into a global leader in cloud infrastructure—now central to AI development.