Cracking code and capital: The 'it' factor of IITs and its imprint on India's startup scene

Bengaluru: In India's booming tech startup scene, the IIT tag carries heft like few others.

Tech startups founded by alumni of the seven old Indian Institutes of Technology (IITs) -Delhi, Bombay (Mumbai), Kanpur, Madras (Chennai), Kharagpur, Roorkee and Guwahati -bagged a disproportionately high share of funding in the past 10 years, showed data put together for ET by market intelligence platform Tracxn.

These 4,153 startups accounted for about 3.7% of the total tech startups founded in the country in the decade since 2015, while attracting $32.9 billion, or about 49%, of the total equity funding. Factoring in the period since the beginning of 2025, these IIT alumni-founded startups account for 48% of the funding, at about $33.7 billion.

While some 44% of the 965 IIT Bombay alumni-founded startups raised funding, at the low end, IIT Guwahati, which had 239 alumni-founded startups in the past decade, saw around 34% of them raise equity funding.

ET Bureau

That's compared to 6.3% (7,141) of the 113,360-plus tech startups overall in the past decade that managed to raise equity funding.

The IIT Edge
This success is a function of several factors, according to founders, investors and other experts. While top-tier pedigree helps open doors, what also helps is the tightly knit network of alumni. An IIT degree - which entails cracking one of the world's toughest entrance exams - also implies strong technical and problem-solving skills, integral to tech startups. Most institutes also have in place an entrepreneurial ecosystem that provides budding entrepreneurs with access to mentors and funding opportunities.

Historical Success
"IIT alumni have undeniably built a strong track record in the startup ecosystem, and that creates a powerful signalling effect for investors. Their technical depth, exposure to high-performance environments and access to a dense alumni network often reduce early-stage risk, which is why many attract funding relatively quickly," said investor K Ganesh, promoter of BigBasket, Bluestone, HomeLane and Portea Medical.

The trend can also be largely attributed to investor perception shaped by historical successes, said Neha Singh, cofounder and chief executive of Tracxn, herself a BTech and MTech from IIT Bombay.

"IIT graduates are often viewed as high-potential founders, backed by a strong track record of building ventures such as Flipkart (founded by IIT Delhi graduates Sachin Bansal and Binny Bansal), Ola (cofounded by IIT Bombay's Bhavish Aggarwal) and Zomato (cofounded by IIT Delhi's Deepinder Goyal)."

The fact that IITs also offer founders access to a robust ecosystem of support is a bonus, according to Singh. This ecosystem includes an extensive network of experienced entrepreneurs, angel investors and highly skilled professionals, which collectively enhances access to mentorship, early-stage capital, strategic partnerships and high-quality talent. "Even amid volatile market conditions, this ecosystem provides a relatively resilient foundation and access to capital to IIT alumni ventures, giving them a significant advantage over other founders," she said.

Founders such as Amit Agarwal, chief executive of proptech unicorn NoBroker and an IIT Kanpur-IIM Ahmedabad alumnus, said given that a lot of smart people in India gravitate towards engineering, getting through to a top IIT has become synonymous with acing an IQ test. "That's how many recruiters perceive IITians; that's how many investors do too," he said.

Risk-taking ability among IITians is higher as well, he said, as compared to peers from lower-ranked institutes, as they have a great brand to fall back on.

Challenges
But even as an IIT tag can give an edge in lining up the first investor meeting, it's ultimately the idea and execution that matters, Singh said. "Being an IITian doesn't come with any guarantees."

Investor Ganesh said it's important to recognise that the pedigree-based bias can also skew capital flow and unintentionally sideline equally capable founders from non-elite backgrounds. The future of Indian entrepreneurship, he said, will be shaped not just by pedigree, but by diversity of thought, resilience and deep customer understanding-regardless of where the founder studied. Of late, the signal effect has been fading, he said.

"As the Indian startup ecosystem matures, investors are increasingly prioritising traction, founder-market fit and unit economics over educational backgrounds. Some of the most compelling ventures in sectors like D2C (direct-to-consumer), agritech or regional SaaS (software-as-a-service) are being built by non-IIT founders who deeply understand local needs," according to Ganesh.