India’s startup ecosystem closed the week with a mix of stronger funding activity, major investment transactions and a growing controversy in the ride-hailing sector.
Indian startups raised a combined $203.4 million across 21 deals during the week, according to Inc42, marking a 3.4-fold increase from $58.9 million in the preceding week. Artificial intelligence attracted the largest amount of capital, while ecommerce recorded the highest number of deals.
At the same time, Bharat Taxi—the cooperative-led ride-hailing platform launched as an alternative to private aggregators—came under scrutiny following allegations from some passengers and drivers in Gujarat of pressure and intimidation connected with shifting rides away from competing platforms. The allegations remain allegations; the identities and affiliations of the groups accused of such conduct have not been independently established.
Bharat Taxi Controversy Raises Questions in Gujarat
Bharat Taxi was officially launched as India's first cooperative-led ride-hailing platform and is operated by Sahakar Taxi Cooperative Limited (STCL).
According to the Ministry of Cooperation, its purpose is not to replace private app-based taxi aggregators. Instead, the government describes it as an alternative driver- and people-centric platform built around cooperative ownership and the economic welfare of drivers.
Ministry of Cooperation — Bharat Taxi announcement
Recent reporting from Inc42, however, has documented allegations from drivers and passengers in Ahmedabad and Gandhinagar that groups stopped or disrupted rides booked through platforms such as Uber and Rapido and pressured passengers or drivers to shift to Bharat Taxi. Some drivers also alleged threats and theft. Technology Tangle
These accounts require careful qualification. Inc42 reported that the identities and affiliations of the people accused of coercion had not been established, and passengers interviewed by the publication did not know whether Bharat Taxi had authorised the alleged conduct. Bharat Taxi had not responded to Inc42's questions for that report. Technology Tangle
The controversy is particularly significant because the government's stated position is that Bharat Taxi is meant to provide another choice, rather than eliminate existing private ride-hailing platforms. Press
Why Driver Economics Matter
Bharat Taxi's model differs from conventional ride-hailing platforms because drivers participate through a cooperative structure.
Inc42's reporting says the platform promotes a zero-commission model and driver ownership/profit sharing. However, some drivers interviewed by the publication alleged that Bharat Taxi did not yet provide enough bookings to sustain their income and said they were under pressure to stop taking bookings from rival apps.
That creates a broader issue for India's ride-hailing market: a driver-focused cooperative model may offer an alternative economic structure, but its success also depends on sufficient passenger demand, reliable service and freedom of choice for both drivers and customers.
Indian Startup Funding Jumps to $203.4 Million
Away from mobility, funding provided a more positive signal for India's startup ecosystem.
Indian startups raised $203.4 million across 21 deals, compared with $58.9 million during the preceding week, according to Inc42's weekly figures. The number of deals increased 50% week-on-week.
AI was the biggest sector by funding value. Five AI startups collectively raised $89.3 million.
Ecommerce, meanwhile, recorded six deals worth a combined $3.8 million, making it the most active sector by deal count. Seed-stage startups raised $20.3 million through five transactions.
Ultraviolette and Ema were identified by Inc42 as the week's most-funded startups, while Peercheque and Sauce.VC were the most active investors, with two investments each. Inc42 Media
The weekly increase is notable, although one week of stronger fundraising should not by itself be interpreted as evidence of a sustained change in the broader funding environment.
True North Takes Minority Stake in InMobi
Another major transaction involved adtech company InMobi.
According to Inc42, private equity firm True North acquired a minority stake in the IPO-bound company. The secondary transaction involved an estimated 2% to 3% stake valued at roughly $50 million to $60 million, alongside a small primary equity component.
InMobi, founded in 2007, provides advertising, marketing and monetisation technology and also operates businesses including Glance and Roposo.
The transaction comes as InMobi works on redomiciling from Singapore to India ahead of a potential IPO. Inc42 reports that the company has appointed bankers for a proposed public offering targeting approximately $1 billion, with a potential valuation in the $6 billion to $10 billion range.
These remain prospective IPO figures rather than a completed offering or confirmed final valuation.
Aequs Plans to Raise Up to ₹650 Crore
Manufacturing company Aequs has received board approval for a proposed fundraising of up to ₹650 crore through a preferential issue of warrants to promoter-group entity Mellwood Trustee Services, according to Inc42.
The company plans to issue 2.8 crore warrants at ₹231.55 each. Half of the amount—₹325 crore—is expected to be paid upfront, with the remaining amount payable when the warrants are exercised.
Following full conversion, the promoter group's aggregate holding would increase from 59.09% to 60.73%. The capital is intended for manufacturing expansion, investments in subsidiaries and general corporate purposes.
IIT Madras-Linked Deeptech Fund Marks ₹450 Crore First Close
Deeptech investing also featured prominently during the week.
IIT Madras and Unicorn India Ventures have announced the ₹450 crore first close of IITM Unicorn Frontier Fund I, according to Inc42. The fund has reportedly deployed close to ₹55 crore across four startups.
The fund has a ₹600 crore base corpus and a ₹400 crore greenshoe option, giving it a potential total size of ₹1,000 crore.
Its investment focus includes areas such as defence technology, space technology, semiconductors, robotics and artificial intelligence, with plans to build a portfolio of around 25 startups. Individual investments are expected to range between ₹15 crore and ₹25 crore.
Startup Stocks Have a Difficult Week
The funding rebound did not translate into uniformly positive public-market performance.
Of the 65 new-age technology stocks tracked by Inc42, 37 finished the week lower, with declines ranging from 0.01% to 35%. The remaining 28 gained between 0.3% and 24.6%.
The combined market capitalisation of these companies fell from approximately $170.2 billion to $166.6 billion, a decline of around $3.6 billion based on the figures reported by Inc42.
What This Week Tells Us
The week's developments highlight several different forces operating simultaneously in India's startup economy.
Private capital returned more strongly after the previous week's relatively weak fundraising total, with AI taking a particularly large share. Deeptech investment also continued to attract institutional capital.
At the same time, the Bharat Taxi controversy demonstrates that innovation in business models can create operational and regulatory questions once platforms begin competing for drivers and passengers at scale.
The important distinction is that Bharat Taxi's cooperative model and the alleged coercive incidents are separate issues. The government describes the service as an additional choice alongside private aggregators, while the alleged intimidation reported in Gujarat has not been established as conduct authorised by Bharat Taxi.
Source
Primary Source: Inc42, “The Bharat Taxi Row, Weekly Funding Rebounds & More,” published September 28, 2026. Additional verification for Bharat Taxi's official objectives comes from India's Ministry of Cooperation through the Press Information Bureau. Inc42 Media
