The Rise of Deep Tech Ventures: India's Journey and Future Challenges

What Are Deep Tech Ventures?

Deep tech ventures represent a cutting-edge initiative that is rooted in advanced scientific research and engineering principles. These ventures are designed to address significant global issues through the implementation of technologies such as artificial intelligence (AI), clean energy solutions, cybersecurity measures, gene therapy advancements, green hydrogen production, sophisticated computing systems, and innovations in agritech. The genesis of these ideas often lies in fundamental research, leading to viable, commercial applications that can transform industries.

Where Does India Stand in Deep Tech?

India has established itself as one of the top 10 nations globally in the realm of deep tech innovation. Historically, the country has concentrated on sectors like e-commerce and digital payments; however, the current ecosystem is evolving to encompass areas such as space technology, biotechnology, and advanced manufacturing. With the backing of prominent investors like Peak XV and Blume Ventures, Indian startups are starting to gain international acclaim.

How Is Funding for Deep Tech Ventures Changing in India?

Funding for deep tech initiatives in India has experienced a remarkable increase, surging from $36 million in 2016 to an impressive $677 million in 2023. This growth has positioned India as the ninth-largest country globally in terms of investment in deep tech. Despite these advancements, Indian startups still receive considerably less funding compared to their counterparts in China and the UK, indicating a pressing need for increased investment in this sector.

Which Areas Have Seen Rapid Growth in India?

• Space Tech: Startups such as Agnikul, Skyroot, and Pixxel have expanded from a mere 1 in 2014 to an astounding 190 by 2024.
• Biotech: The number of companies in this sector has skyrocketed from 50 in 2015 to nearly 6,000 by 2024.
• GenAI Startups: More than 70 firms have collectively raised $700 million by the third quarter of 2023.
• Climate Tech: Innovations focused on renewable energy and sustainability are spearheading this sector.

What Are the Likely Challenges?

• Ecosystem Development: Fostering collaboration between academia, government bodies, and investors is vital for growth.
• Scalability Issues: Founders often encounter challenges in creating scalable business models that can achieve widespread success.
• Funding Gaps: There is a critical need for strategic backing from investors as well as regulatory reforms to bolster the ecosystem.
• Government Role: Enhancing research and development, protecting intellectual property, and facilitating market entry can significantly contribute to fostering self-reliance in deep tech.