The government has issued operational guidelines for the ₹10,000-crore Startup India Fund of Funds 2.0. The scheme will invest in SEBI-registered Alternative Investment Funds, which will invest in DPIIT-recognised startups. The guidelines classify AIFs into four segments, including those focused on deep-tech, early-growth stage startups, tech-driven manufacturing and sector-agnostic startups.

Prophetic has unveiled two headbands that it claims can help users "control their dreams". The devices send ultrasonic energy through the forehead and into the prefrontal cortex, pushing dreams into a more lucid state, the startup said. The Dual headband is priced at $449 (about ₹42,300), while the more advanced Phase will cost $1,299 (around ₹1.22 lakh).

A study by City University of New York (CUNY) and King's College London flagged safety concerns with Elon Musk's Grok 4.1 after it gave harmful advice during a mental health simulation. It found that Grok validated a delusional scenario and suggested risky actions. Claude Opus 4.5, Gemini 3 Pro Preview, OpenAI's GPT-4o and GPT-5.2 were other models that were tested.

Startups raised around $66 million in funding this week, marking a 33% drop from around $100 million secured in the same period last year, according to data intelligence platform Tracxn. Despite the annual decline, funding rose nearly 44% from the previous week. This week, the top three VCs were Rainmatter, All In Capital and Blume Ventures, each closing two deals.

Global fintech platform Pine Labs acquired 100% stake in checkout optimisation startup Shopflo for around ₹88 crore in a cash deal, as part of its strategy to strengthen online merchant solutions. The move is expected to enhance checkout and payment capabilities for D2C brands. This will support Pine Labs' broader push to build an integrated commerce and full-stack payments platform.

Microsoft ex-CEO Steve Ballmer said he was duped by a fintech startup founder, who pleaded guilty to fraud last year, and that he "felt silly". In a letter to a judge, he said he lost his entire $60 million (₹565 crore) investment in Aspiration Partners, founded by Joseph Sanberg. Sanberg allegedly used fake documents to hide the company's financial condition.

Nearly two years after operations were halted, over ₹800 crore of customer funds remain stuck in Paytm Payments Bank, CNBC-TV18 reported citing sources. Around half is locked in frozen accounts, while another ₹400 crore reportedly remains unclaimed. There has been no meaningful drawdown in these balances over past year, despite customers being given opportunities to withdraw or transfer funds.

Series, an AI-powered social networking app on iMessage, has raised $5.1 million (₹48 crore) in a pre-seed round. Founded by Yale University students Nathaneo Johnson and Sean Hargrow, the app lets users text an AI that matches them with like-minded people via swipeable "share" cards. Venmo Co-founder Iqram Magdon-Ismail and Reddit CEO Steve Huffman are among the investors.

Pronto is in talks to raise $15-20 million (₹188 crore) from US-based tech investor Lachy Groom, Moneycontrol reported. The round is likely to value the instant househelp startup at around $200 million, double its last valuation. Last month, it raised $25 million (₹236 crore) at a $100 million valuation. Pronto’s fundraise comes amid rising investment in quick home services segment.

CBI arrested DGCA and Reliance Industries officials, alleging ‌bribery payments to secure approvals for drone imports by Asteria Aerospace. It is a Bengaluru-based drone technology startup providing advanced UAV platforms and AI software. The company, which was started in 2011, was bought by Reliance in a $2.45 million deal in 2019. Reliance Jio Platforms controls 74% of Asteria, Reuters reported.