India’s Defence Tech Moment, Gujarat Tops Startup Charts & More

Inside India’s Next Big Deeptech Bet

This year’s Republic Day parade is set to feel different. Beyond the imported jets, the spotlight will firmly be on homegrown drones and AI-powered weapons. So, has India’s defence tech moment arrived?

The Mainstream Mandate: For decades, India’s defence sector was defined by massive defence import bills. However, Operation Sindoor served as a brutal wake-up call. By 2025-end, local procurement soared, and the Centre systematically lowered entry barriers by absorbing early technical and financial risk that once deterred private capital. 

Sovereign Fountainhead: The Centre is effectively de-risking the sector by becoming its primary benefactor. Programmes like iDEX and the upcoming INR 1 Lakh Cr fund are fuelling product development and prototyping with clearer procurement routes. Meanwhile, the state is providing subsidised infrastructure to reduce upfront investment before demand validation. 

These mechanisms are creating predictable revenue pathways, reducing R&D timelines and lowering operating costs.

The Capital Surge: Investor appetite for the defence tech sector is also reaching a feverish pitch. Of the $78 Mn raised by defence tech startups over the last decade, a staggering $68 Mn was secured in 2025 alone. While drones remain the mainstay, capital is also flowing into core intellectual properties – AI-enabled surveillance, ammunition, and secure signals. Investors are now focussing on embedded systems and patents that define true capability.

Beyond The Horizon: The defence tech ecosystem is entering a phase of predictable demand and scale. The sector is also expanding beyond drones into electronic warfare, secure communications and AI-led surveillance. The shift from prototyping to multi-year contracts suggests that defence tech is becoming the most durable pillar of the Indian deeptech landscape, where scale will follow sovereignty.

Can the defence tech ecosystem convert this alignment between policy, capital and demand into durable scale? Let’s find out… 

From The Editor’s Desk

🚀 Gujarat Tops Startup Rankings

• Gujarat clinched the top spot as India’s best-performing startup ecosystem for the fifth consecutive time in DPIIT’s annual rankings. Karnataka was second, while Delhi anchored the bottom of category A as an emerging ecosystem.
• In category B, which included states and UTs with a population of less than 1 Cr, Goa and Arunachal Pradesh topped the list as ‘best performers’, followed by Himachal Pradesh and Manipur.
• The annual rankings evaluated 34 states and UTs under Startup India on parameters such as institutional support, infrastructure, funding, and innovation between January 2023 and November 2024.

📈 Weekly Funding Soars 293%

• Indian startups cumulatively raised $268.6 Mn across 28 deals last week, zooming 293% from $68.4 Mn in the prior week, signalling renewed investor confidence.
• Ecommerce dominated the sectoral charts, with 7 startups securing $49 Mn. Fintech followed closely with two startups bagging $38 Mn, while advanced hardware, cleantech, and enterprise tech each clinched three deals.
• Zerodha’s VC arm Rainmatter and Stellaris Venture Partners led investment activity with two investments each, prioritising early traction plays. Meanwhile, seed stage startups captured $16.4 Mn across eight deals, down marginally from $16.8 Mn in the prior week.

📊 Bearish Week For Startup Stocks

• Thirty-three of the 50 new-age tech stocks under Inc42’s coverage declined in the range of 0.59% to 10% last week. The sell-off eroded the cumulative m-cap of startup stocks by 3% to $136.55 Bn from $140 Bn in the preceding week.
• Eight companies, including Pine Labs, EaseMyTrip, Tracxn and FirstCry, plunged to fresh 52-week lows. On the flip side, TAC Infosec, ArisInfra and Groww were the biggest gainers last week.
• The bearish momentum stemmed from mixed Q3 results, which revealed squeezing margin, decelerating YoY growth, sector-specific headwinds and subdued forward guidance. 

🤖 Freshworks’ AI Reinvention

• The Nasdaq-listed SaaS firm has accelerated its AI transformation, winding down non-core modules and embedding AI copilot Freddy across its portfolio of products.
• Freshworks is aiming to hit $1 Bn in revenue by 2026, driven by a growing base of large customers, an expanded AI product portfolio, and deeper cloud integrations enabled by its recent acquisitions.
• However, Wall Street wariness persists on sub-15% growth, concerns over execution after cofounder exits and soaring competition. 

🎯 India’s Listed Startup Tracker

• The Indian startup ecosystem is home to 50+ listed new-age tech companies that boast a combined market capitalisation of over $149 Bn. 2025 alone saw 18 startup listings, eclipsing 2024’s 13 listings.
• The usual suspect fintech continues to lead the pack with 10 public listings to date, followed closely by ecommerce and SaaS with nine and eight D-Street debuts.
• The listings symbolise operational scale and exit ramps in a $150 Bn+ ecosystem that has birthed 100+ unicorns. Overall, the IPO trend is expected to percolate well into 2026. A pipeline of 15+ startups is roaring to list on the exchanges.  

Inc42 Markets

Inc42 Startup Spotlight

How Go Zero Is Making Guilt-Free Scoops Real?

India’s ice cream market is $3.6 Bn strong. Yet, health-conscious consumers have to choose between taste and traditional low-calorie options that lack indulgence. Mumbai’s Go Zero is trying to fix this with its high-protein treats, but without the sugar crash.

Cracking The Code: Kiran Shah, with a decade-long experience steering the iconic Apsara Ice Creams, launched Go Zero in July 2022 to target the “woke” indulgence. The D2C ice cream brand claims that its product portfolio is sugar-free yet creamy, spanning high-protein pints to plant-based novelties that don’t compromise taste.

Quick Commerce Hypergrowth: Go Zero has skipped retail shelves entirely, betting rather on quick commerce platforms across 16+ cities for instant delivery. But the real game-changer came during its debut on Shark Tank India Season 4, which doubled monthly users to 8 Lakh and skyrocketed FY25 revenue 3.2X YoY to INR 35 Cr.

Asset-Light Scale: Unlike its peers, Go Zero has no in-house manufacturing facilities. It partners with contract manufacturers to meet exact specifications for its ice creams, enabling rapid production without the capex drag. This keeps the brand nimble while enabling rapid rollout. So, can Go Zero dominate India’s health-dessert race?

Infographic Of The Day

India’s AI moment is here — moving from adoption to execution, and from experimentation to building real AI infrastructure at scale.