India's semiconductor startups see investor interest building

Indian semiconductor startups raised $92 million in the first five months of 2026 across 12 deals, nearly four times the funds raised in the entire 2025, boosted by government initiatives, rising investor interest and more firms getting into production.

According to data from Venture Intelligence, companies that raised funds in 2026 include Constelli, C2i Semiconductors, HrdWyr and VerveSemi, each raising upwards of $10 million. ET had earlier reported that Agrani Labs and Calligo Technologies were in talks to raise fresh funds.

Of the funds raised in the January-May period, $34 million were seed rounds across eight deals and the rest were Series A funding. Last year, semiconductor startups raised $25 million in six deals.


Startup founders and investors credit the government for playing a key part in triggering the increased activity in the sector.

DLI, AI boom

There is growing interest from Indian investors to back startups, C2i Semiconductors cofounder and chief executive Ram Anant said. There is also a big push from the government through design-linked incentive (DLI) scheme, which helps crowd in private and venture capital funds by absorbing early-stage risks.

The government has so far approved proposals from about two dozen companies under the DLI scheme, according to data from the Ministry of Electronics and Information Technology.

Multiple DLI beneficiaries are raising or have raised funds from private venture capital firms. These include Mindgrove Technologies, VerveSemi, InCore, BigEndian Semiconductors, Calligo Technologies and MOSart Semi.

With an ecosystem developing, at least half a dozen semiconductor companies have taped out, or completed the design blueprint, and sent the chips to foundries for manufacturing.

C2i Semiconductors, Mindgrove Technologies, Vervesemi and Calligo Technologies have tapped into global foundries in Taiwan and South Korea for tape-outs. Several of these companies are also getting into production. ET earlier reported that Mingrove Technologies and Agnit Semiconductors would be getting into production later this year.

The last two years have also seen multiple executives from chip majors such as AMD, Intel and Texas Instruments turning entrepreneurs to design AI chips. Agrani Labs, started by four Intel and AMD executives, is making AI inference chips, and C2i Semiconductors, started by former Texas Instruments veterans, is focusing on power management for AI data centres.

Naganand Doraswamy, managing partner at Ideaspring Capital, said in addition to the push from the government, there is a huge opportunity for India to have its own chips in whitegoods, which is a key focus area for the company.

While interest from Indian investors is robust, C2i Semiconductor’s Anant expects funds managing $300-600 million to also now start looking at the local semiconductor sector.

Nascent ecosystem

While the ecosystem is developing, there is a need for more local companies for testing semiconductor parts in India, Anant said. His company is also planning to set up in the US as the local market is not big enough.

Doraswamy pointed out that cost of production, from fabs to packaging, is still expensive for high-end chips, and the ecosystem needs improvement.

"The semiconductor playbook for India is still new, as we have yet to see companies scale,” said Yali Capital partner Karthikeyan Madathil. “While Series A companies can be evaluated from the India point of view, Series B and above will have to be compared with Silicon Valley execution, which we have yet to see in India, but the Indian companies have the potential to reach,” he said. “In addition, the go-to-market playbook for semiconductors is different from that of SaaS, and this is going to matter in large rounds.”