Stories
Nikhil Kamath Warns Startups: 'Raise Money Now, Next Year Could Be Bad'
- •Zerodha co-founder Nikhil Kamath issued a serious warning to startups regarding funding, stating 'next year could be bad'.
- •Kamath agreed with a user's post advising startups to raise capital soon, responding with a '100%' emoji.
- •The post suggested raising enough money for a year or two, spending diligently, and saving, as the next year could be challenging.
- •India saw 1,134 funding rounds in the first nine months of 2026, a decrease from last year, but total funding increased.
- •Investors are re-evaluating valuations, focusing on fundamentals, growth efficiency, and profitability, with AI attracting significant capital.
Key Questions Answered
Nikhil Kamath warned startups to raise capital immediately because the financial sector environment next year could be bad. He expressed complete agreement with a social media post advising founders to secure enough funds to last a year or two and to spend diligently.
In the first nine months of 2026, India recorded 1,134 funding rounds, which is a sharp decrease from 1,838 rounds during the same period in the previous year. However, total funding actually increased from $9.7 billion to $10.3 billion, indicating that startups raised capital through fewer but larger rounds.
Investors are emphasizing fundamentals, growth efficiency, profitability, and sustainable growth following the exuberance of the 2021 funding cycle. Meanwhile, foreign capital is increasingly targeting artificial intelligence, with firms like Accel launching a $550 million India fund focused on AI.
