Technology-driven innovation plays a crucial role in enhancing effectiveness and productivity along with global competitiveness. With the advent of the information technology era and the digital revolution with Industry 4.0, numerous technology-based startups have surfaced as entrepreneurs across the world and seek to operationalize their ideas into new products and services. The present study is an attempt to assess the factors affecting innovation capability in technology startups through an empirical analysis combining ordinary least squares and ordered probit analysis of data collected from 375 technology-based start-ups in Delhi-NCR. It takes into account entrepreneur-specific, firm-specific, and external environment-specific factors of a firm that influence the innovation capability. The study points out that human capital in STEM broadens the knowledge corridor to enhance innovation while specific prior knowledge constrains the knowledge corridor to limit innovation. It also sheds light on the distinct challenges encountered by women startup founders that impact their capability to innovate. The findings of the study will help start-up owners and policy-makers make adjustments in their policy-making and strategy to enhance the innovation of technology-based startups operating in India. Keywords Innovation, Industry 4.0, STEM, Gender, Entrepreneurship