Indian internet companies could report stronger-than-expected revenue growth in upcoming quarterly results despite tight funding conditions, according to a Morgan Stanley report published on October 19, 2026 — but the startup funding in India pipeline told a harsher story.
The September slump
Internet companies raised $299 million in September 2026, representing a 37% decline from August and a 52% drop compared with September 2025. The month recorded 35 funding deals (36 in August, 39 in September 2025), and no large funding deals were recorded during September at all. Investment is increasingly concentrated in early-stage and mid-stage companies, while late-stage funding activity remains limited.
Demand holds up
The brokerage said demand across parts of the internet economy has remained stronger than some market participants anticipated, even amid intense competition across food delivery, quick commerce and logistics. However, the report highlighted growing differences between companies in the same sectors — businesses demonstrating stronger execution and better earnings are attracting greater investor interest and valuation premiums.
Why it matters for founders
September's $299 million with zero large deals is a reminder: the funding window is narrow and stage-specific. Early and mid-stage rounds are still clearing, but late-stage money wants proof — revenue growth, unit economics, execution gaps vs peers. If you are raising a growth round now, Morgan Stanley's message is simple: show the earnings beat, not the vision deck.