India’s most credentialed graduates are building fewer startups this year, even as the country’s overall startup engine runs faster than ever. Only 79 alumni of the Indian Institutes of Technology (IITs) and 20 alumni of the Indian Institutes of Management (IIMs) founded new technology startups between January and August 2026, according to Tracxn data reported by The Economic Times on 31 October 2026. In the whole of 2025, 307 IIT graduates and 71 IIM graduates had founded startups.
The two figures are not a like-for-like comparison. Tracxn records only the year in which a company is incorporated, so it has no matching January–August figure for 2025, and the 2026 count could rise as late incorporations are added. Even so, the pace of founding from the two premier pipelines looks markedly slower.
A boom without the usual founders
The slowdown is happening in a rising market, not a falling one. Tracxn counted 6,353 new tech startups in India up to August 2026, already well ahead of the 3,969 founded across all of 2025. Of the 196,704 tech startups the platform tracks in India, 6,147 have at least one IIT founder and 2,102 have at least one IIM founder.
Vikram Gupta, Founder and Managing Partner of IvyCap Ventures, said the rise in startup formation was encouraging, but the absence of a meaningful increase in IIT and IIM founders pointed to a large pool of untapped talent. If India wants to build the next generation of enduring companies, he said, entrepreneurship has to become a viable career choice for a much wider talent pool.
Why AI jobs are winning
Saakshi Gera, Managing Director at Kedaara Capital, said startup numbers are climbing largely because AI and no-code tools have sharply cut the cost of launching a venture, while layoffs have made entrepreneurship a fallback for many. But volume, she noted, is not quality: investors continue to prioritise sustainable unit economics, and India’s most credentialed talent is increasingly choosing safer, AI-adjacent jobs.
IIT alumni still found far more ventures than IIM alumni. Neha Singh, Co-founder of Tracxn, linked this to the larger IIT alumni base and the engineering and deep-tech orientation of most tech startups, adding that technical founders tend to start early, with business expertise from IIM graduates or other professionals joining as companies scale.
The study covered alumni of IITs including Bombay, Delhi, Kharagpur, Kanpur, Madras, Roorkee, Jodhpur, Hyderabad, Guwahati, BHU (Varanasi), Mandi, Bhubaneswar and ISM Dhanbad, and IIMs at Ahmedabad, Bangalore, Calcutta, Indore, Lucknow, Udaipur, Nagpur, Kashipur, Sirmaur and Sambalpur.
What it means for campuses
For higher education institutions, the data is a nudge to look again at how entrepreneurship is supported on campus. Incubators, alumni-backed prototype funds, credit for startup work and flexible exit-and-return options under NEP 2020 can lower the personal risk of founding early. At the same time, the strong pull of AI roles shows how quickly industry demand is reshaping graduate career choices, and why AI skills, product thinking and venture-building need to sit side by side in the curriculum.
Source: Tracxn data as reported by The Economic Times and Business Standard, 31 October 2026.
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