BENGALURU: India’s deeptech ecosystem – comprising startups in AI, spacetech, advanced manufacturing, and semiconductor design – added over 480 new ventures in 2023, up two times the previous year. The cumulative base now stands close to 4,000.
In 2024, the sector experienced a remarkable surge in funding, with investments rising by 78% compared to the previous year. The sector’s expansion was fuelled by supportive govt policies, rapid advancements in generative AI and breakthrough innovations from emerging companies, says a report by Nasscom and Zinnov.
The report says top 10 deeptech startup funding rounds in 2024 accounted for about $600 million of total deeptech funding, which stood at $1.6 billion. Of these top 10, all but one were AI-powered software platforms solving for different use cases.
These deeptech startups not only attracted more funding but also commanded higher investor confidence, with median ticket sizes matching or surpassing those of traditional tech startups.
Yet, founders and investors warn that India risks squandering this momentum unless ecosystem matures beyond early-stage support and builds robust demand, capital continuity, and meaningful exit pathways.
“The best way to ensure Rs 10,000 crore reaches the right builders is to ally with the right venture capital funds who have a good track record,” said Kaushik Mudda, cofounder of Ethereal Machines, a Bengaluru-based startup that builds CNC machines critical to precision manufacturing. “Most funds or venture capitalists either try to rely on market reports and studies or western models that have worked to make investment decisions instead of spending time understanding underlying technologies.“
Mudda sees govt’s current push as a “real policy pivot,” one that signals long-term national ambition. But deeptech startups face a fundamental challenge – revenue often comes after years of R&D, and capital needs are front-loaded. “We’ve managed by being extremely frugal,” Mudda said. “Now I see a lot more startups having benefit of raising larger rounds in deeptech, I hope funds are then used wisely before revenue kicks in.“
Some founders argue that the bigger bottleneck lies in the lack of domestic market depth. Saurabh Chandra, founder of Ati Motors, a startup building autonomous industrial vehicles, said the lack of a domestic market also increases the capital requirements for a startup since global markets are the only viable option. “This is the route we have also taken,” he said.
