Funding, Consumer Trust Key Hurdles for Indian Startups: Rukam Capital Founder

Indian startups today contend with a range of hurdles, including access to consistent funding, navigating intricate regulatory and tax frameworks, overcoming bureaucratic obstacles, retaining talent, and earning consumer confidence in a price-sensitive market, according to Rukam Capital's Archana Jahagirdar.

Jahagirdar -- the Founder and Managing Partner of the venture capital firm, which has invested in startups like Beco, Sleepy Owl, Indus Valley, GO Desi, Burger Singh, and Antithesis -- believes that while ambition and innovation of Indian startups are undeniable, access to consistent funding, especially at the early stage, remains a major roadblock.

"Unlike more mature ecosystems, India still sees uneven distribution of capital, with non-metro startups facing even steeper barriers. Operating within a maze of complex rules and taxing systems is another industry challenge.

"Beyond funding, Indian startups often grapple with regulatory bottlenecks, talent retention, and building consumer trust in a price-sensitive market. A common pitfall is chasing valuations without establishing a clear path to profitability or differentiation," she said.

Founders must double down on building strong fundamentals, stay nimble, and leverage tech for scale and efficiency. Surrounding themselves with the right partners, whether VCs, advisors, or early evangelists, can make all the difference, Jahagirdar said.

Over the past decade, India's startup scene has transformed dramatically. From a few thousand startups in 2016 to over 150,000 today, the ecosystem has matured in both scale and ambition.

Consumer tech has been at the heart of this change, revolutionising how Indians shop, pay, travel, and interact online.

"We are seeing a new generation of consumer tech startups coming from Tier 2 and Tier 3 cities, creating products that are hyperlocal, digital-first, and highly personalised," says Jahagirdar.

Venture capital, she notes, has been a key enabler -- not just by providing funding, but by partnering with founders to shape business models, scale operations, and build strong leadership teams.

With recent IPO momentum and growing interest in AI-led consumer experiences, investor confidence is bouncing back.

"Indian startups aren't just chasing growth, instead, they are building with clarity, stronger unit economics, and long-term vision. The bar is higher, and that's a good thing," she says.

Jahagirdar sees significant, largely untapped opportunities in Bharat -- the one beyond the metros.

With over 63 per cent of the population outside urban centres, sectors like agritech, education, financial services, and clean energy are ripe for innovation.

Startups that engage thoughtfully with these communities and build context-driven, tech-enabled, cost-effective offerings can drive real impact while expanding their market presence.

"When you are building for Bharat, you are not just solving for scale, you are solving for relevance. The needs of middle India are nuanced and deeply rooted in context," she advises startups.

Jahagirdar believes startups can thrive despite fierce competition for funding and the pressure to scale quickly. Scalability, she explains, means building a business model that can grow efficiently without ballooning costs.

To stand out in a crowded funding landscape, founders need a clear, compelling story and a solid business plan. Exploring diverse funding avenues -- angel investors, crowdfunding, government grants, and venture debt -- can reduce reliance on traditional VC routes, she said.

Government initiatives like Startup India, the Seed Fund Scheme, and various state-led policies have played a meaningful role in shaping the landscape, providing funding, mentorship, and regulatory support.

Platforms like Startup Mahakumbh are bringing startups from across the country together, giving early-stage companies much-needed visibility. Jahagirdar suggests that further simplifying compliance and tax laws, supporting dual listing, and offering better incentives for domestic investors could strengthen the ecosystem even more.