Startup Spotlight: Key Developments Shaping India’s Innovation Landscape This Week

This week, India’s startup ecosystem signalled a clear shift — from services to deeptech and from a light-touch regulatory environment to stronger oversight. With state governments making large bets on spacetech, semiconductors and skill development, and regulators tightening scrutiny on gaming, fintech and data protection, the landscape is entering a decisive new phase. Here are the top developments of the week.

Top Startup News of the Week

Karnataka Pivots to Deeptech at BTS 2025

At the Bengaluru Tech Summit 2025, Karnataka announced a decisive pivot from its traditional IT-services-driven economy to a deeptech and research-led growth model. The state secured ₹2,600 crore in investment commitments across semiconductor manufacturing, battery technologies and biotech.

Deputy Chief Minister D.K. Shivakumar also unveiled plans for an international business complex in Bengaluru and a massive 9,000-acre AI City in Bidadi. This follows the newly introduced SpaceTech Policy, which aims for Karnataka to capture 50% of India’s space market and 5% of the global market by 2034.

BlackSoil–Caspian Merger Creates ₹1,900 Cr NBFC

After months of regulatory approvals, BlackSoil Capital and Caspian Debt have completed their merger to form a ₹1,900 crore NBFC, operating under BlackSoil Capital Pvt Ltd. The combined entity gains access to nearly 5,000 new borrowers and is targeting 25% CAGR in AUM over the next few years. The NBFC plans to deepen investments across agritech, healthcare, consumer services, fintech and cleantech, strengthening debt capital availability for growing startups.

Easebuzz Secures Full-Stack Payments Licence from RBI

Fintech minicorn Easebuzz received final authorisation from the Reserve Bank of India to operate as a full-stack payments services provider. With permissions now covering online, offline and cross-border payment solutions, Easebuzz joins the limited pool of players with such comprehensive regulatory approval. Its platform will now support merchants in accepting payments through cards, UPI, net banking, wallets and subscription systems, marking a significant scale-up in its payments infrastructure capabilities.

Elevation Capital Offloads Paytm Shares Worth ₹1,556 Cr

Venture capital firm Elevation Capital sold nearly 1.28 crore shares of Paytm for ₹1,556 crore, at a ~4% discount to the previous BSE closing price. Elevation held over 15% stake in Paytm as of September 2025, valued at more than ₹13,000 crore. The block deal comes at a time when Paytm’s stock has rallied nearly 16% in the last three months, driven by improved revenues and profitability in Q2 FY26.

BlackBuck Founders Sell Shares Worth ₹243 Cr

In another significant liquidity event, the founders of logistics major BlackBuck offloaded shares worth ₹243.5 crore through multiple block deals. CEO Rajesh Yabaji sold 20 lakh shares worth ₹135.3 crore, while COO Chanakya Hridaya and Balasubramaniam sold 8 lakh shares each, totalling ₹54.11 crore per founder. The shares were absorbed by institutions including TIMF Holdings, Motilal Oswal, 360 ONE Asset Management, Citigroup and Goldman Sachs. BlackBuck’s stock has surged 19% in the last three months and is up 43% year-to-date.

ED Raids Gameskraft, WinZO in Algorithm Rigging Probe

The Enforcement Directorate conducted searches at multiple offices of Gameskraft and WinZO across Bengaluru, Delhi and Gurugram following user FIRs alleging algorithmic rigging. Investigators reportedly found crypto wallets linked to promoters, raising questions about possible laundering through digital assets. The raids underscore rising regulatory scrutiny of the online gaming sector, especially around fairness, algorithmic integrity and money movement.

Deepinder Goyal Exploring Wearable Startup ‘Temple’

Eternal founder Deepinder Goyal is reportedly exploring the launch of a new wearable-device company named Temple. While discussions are still at an early stage, the brand’s website has gone live with a “Coming Soon” message and a teaser statement: “The future of health starts where no one’s looking. Inside your brain.” The move hints at a potential entry into neurotech-driven wearables, though no official details have been confirmed yet.

Government May Shorten DPDP Compliance Timelines

IT Minister Ashwini Vaishnaw indicated that the government is considering compressing the 18-month compliance window for the recently notified Digital Personal Data Protection (DPDP) Rules, 2025.
Large companies already following global standards, he argued, should be able to replicate similar practices in India more quickly.
The move comes as the Data Protection Board is being set up to oversee governance of personal data usage by digital businesses.

Telangana Cabinet Clears Gig Workers Bill

The Telangana Cabinet approved the draft Gig and Platform Workers (Registration, Social Security and Welfare) Act, 2025, aimed at safeguarding gig workers’ rights. The bill proposes:

• a 20-member decision-making board,

• a welfare fund,

• a grievance redressal mechanism, and

• mandatory algorithmic transparency, requiring companies to disclose how automated decisions affect worker earnings.
  The bill will be introduced in the upcoming Assembly session and is expected to become a model template for gig-economy regulation in India.

SIDBI Venture Capital Makes ₹1,005 Cr First Close for Spacetech Fund

SIDBI Venture Capital Ltd (SVCL) announced the first close of ₹1,005 crore for its new Antariksh Venture Capital Fund, India’s largest dedicated spacetech fund. The fund is anchored by IN-SPACe, which contributed ₹1,000 crore. AVCF aims for a ₹1,600 crore corpus, with investments planned across launch systems, satellites, payloads, earth observation, communications and downstream applications. This fund significantly strengthens India’s early-stage and growth-stage spacetech pipeline.

From deeptech bets and spacetech funding to intensified regulatory actions and major founder/VC liquidity events, the week highlighted a sharp transition in India’s startup landscape. The direction is clear: bigger capital, deeper technology, stronger compliance — and a far more evolved startup ecosystem than ever before.