India's Defence Tech Moment, Darwinbox Nets $40 Mn & More

India’s Defence Tech Moment Arrives

The recent Indo-Pak military conflict brought to the fore how battlefields are getting future-ready as we speak. As heavily armed drones, security-piercing radars, autonomous AI systems, and unmanned vehicles of destruction become the new horsemen of the apocalypse, how prepared are we?

As per Inc42’s latest report, India is projected to become a $19 Bn defence tech powerhouse by 2030. Amid this, AI in defence is going to be the country’s next big bet, with 89% of the homegrown defence tech startups already claiming to power their offering with this emerging technology.

Here’s what Inc42’s “India’s Defence Tech Startup Ecosystem Report 2025” reveals:

• India’s AI defence market alone is projected to hit $2.5 Bn by 2030
• Homegrown defence tech ventures have raised $432 Mn+ between 2014 and H1 2025
• Bengaluru, Delhi NCR and Chennai harbour the biggest chunk of funded startups
• Drone tech ventures cornered 71% of the total funding raised by defence tech players

India’s Next-Gen Defence Stack: Almost half of this $19 Bn potential market will be driven by advanced technologies such as AI, autonomous systems, quantum computing, and next-generation radar and surveillance platforms. Coupled with the armed forces’ growing reliance on drones, AI-powered decision-making tools and highly mobile electric radar systems are expected to take centre stage.

A Will To Fortify Frontiers: At a time when the global AI military market is expected to more than double to $35 Bn by 2030, there is a growing camaraderie among VCs and PEs to supercharge India’s defence tech momentum. In the last two years, homegrown defence tech startups raised 70% of the total amount bestowed upon this sector.

However, challenges like scaling manufacturing to meet military-grade requirements, advancing deeptech R&D in propulsion, quantum sensing, and large-platform autonomy remain. But, with AI tiptoeing its way into defence, India’s moment has finally arrived.

From The Editor’s Desk

Nazara’s IP Gamble Pays Off: In Q1 FY26, the gaming giant’s net profit surged 118% YoY to INR 51.3 Cr and operating revenue doubled YoY to INR 498 Cr. This surge came largely on the back of gaming and adtech growth, supported by a diversified IP portfolio and global expansion.

Darwinbox Nets $40 Mn: The HR tech unicorn has raised about INR 335 Cr in a mix of primary and secondary funding from Ontario Teachers’ Pension Plan’s late-stage investment arm. Darwinbox helps enterprises manage payroll, recruitment and employee engagement. /

EaseMyTrip’s Gloomy Q1: The OTA consolidated net profit crashed about 99% to INR 44.3 Lakh in Q1 FY26 from INR 33.9 Cr in the year-ago quarter. Operating revenue tumbled over 25% YoY to INR 113.8 Cr during the quarter under review.

Lifelong Online Nets $13 Mn: The D2C consumer durables brand has raised the capital from existing backers at a post-money valuation of $500 Mn. Lifelong Online sells gas stoves, mixer grinders, cookware, treadmills, dumbbells and yoga accessories.

Decoding Fractal’s DRHP: The SaaS unicorn has filed its DRHP with SEBI for an INR 4,900 Cr IPO. As per its draft papers, TPG Fett Holdings Pte. Ltd. is the biggest shareholder with a 25.7% stake, while GLM Family Trust and Apax own 15.7% and 18.7%, respectively.

Arintra Nets $21 Mn: The GenAI-powered medical coding startup has raised the capital in its Series A round led by Peak XV Partners. Arintra operates an AI-native platform that helps its clients automate insurance claims submissions.

PhonePe Tops UPI Charts: PhonePe and Google Pay retained their top spots in the digital payments realm in July. While the former sat at the top with 46.64% market share, the latter played second fiddle with 36.15%. At 7%, Paytm took third place.

Zaggle’s Q1 Profit Zooms: The fintech SaaS company’s consolidated net profit surged 56% to INR 26.1 Cr in Q1 FY26 from INR 16.7 Cr in the year-ago quarter. Revenue from operations also zoomed 32% YoY to INR 332 Cr.

Inc42 Startup Spotlight Can This Startup Become The Urban Company Of Pet Care

When Karthikeyan P and Shweta Sharma Karthikeyan struggled to find reliable care for their dogs during a post-pandemic trip, they saw the gap in Bengaluru’s pet services. Disappointed by kennels and relatives unable to cope, they envisioned a trusted, on-demand platform for pet care.

Writing A Pawsome Playbook: Founded in 2021, PawSpace offers grooming, pet taxi, fresh food delivery, boarding, sitting, walking, training, relocation, and even pet funeral services. The startup uses a strict five-step vetting process for service providers, ensures ongoing training, and maintains a “cage-free” model. Some services are run by in-house staff, while others follow a commission-based marketplace approach.

Marking Pawprints: India’s pet care market is projected to touch INR 2.1 Lakh Cr by 2032. With more than 500 startups already in the space, PawSpace differentiates itself with its asset-light, scalable model, high repeat customer rate.

With its customer first approach, can PawSome become the “Urban Company of pet care” while keeping services affordable and accessible?

Wishing you a very Happy Independence Day from all of us at the Inc42 family!

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