India’s deep tech-focused venture capital ecosystem is witnessing a surge in fundraising activity as global investors turn their attention to sovereign technology alternatives, and the Indian government doubles down on innovation in sectors like AI, space tech, semiconductors, robotics, and climate tech.
Homegrown venture capital firms such as Speciale Invest, Ideaspring Capital, Mela Ventures, Pi Ventures, Java Capital, Navam Capital, and Bharat Innovation Fund (BIF) are actively raising new funds—a signal that India’s deep tech moment is accelerating with strong momentum in early 2025.
India’s Deeptech VCs Expand Fund Sizes
Venture firms are significantly increasing their fund targets to meet the growing demand for early-stage capital among deep tech startups.
- Java Capital, which initially targeted ₹50 crore, is now planning to raise ₹250 crore, citing improved investor awareness and ecosystem maturity.
- Bharat Innovation Fund (BIF) is raising $150 million (~₹1,290 crore) for its second fund—more than double the ₹600 crore raised for its first fund.
- Navam Capital is raising a maiden fund of $30 million (~₹258 crore), focusing on sectors like aerospace, semiconductors, and robotics. The fund has previously backed firms like Ather Energy and Agnikul Cosmos.
- Speciale Invest, which has already made notable bets in space and aviation tech, has closed its third fund, though it declined to disclose final numbers.
- Ideaspring Capital is targeting a larger third fund after raising ₹265 crore in its second round. Founder Naganand Doraswamy expects to exceed the previous amount due to increasing LP interest.
- Mela Ventures, led by industry veteran Krishnakumar Natarajan, is also raising its second fund after closing its debut round at ₹320 crore.
Meanwhile, Pi Ventures, one of the first movers in Indian deep tech VC, announced a second fund of over ₹700 crore in 2023. The firm’s portfolio includes breakthrough startups like Agnikul (space tech), Pixis (AI), and Niramai (AI-based health diagnostics).
Deeptech Deal Momentum Doubles
According to data from Venture Intelligence, investments in India’s deep tech startups doubled in the first four months of 2025, reaching $324 million across 35 deals, compared to $156 million from 21 deals in the same period last year. This sharp rise reflects growing investor appetite for high-impact, IP-led innovations in India.
The current funding climate, though still cautious, is significantly more favorable for deep tech compared to just a few years ago. Vinod Shankar, co-founder at Java Capital, noted that when they launched in 2020, they had to educate LPs about deep tech investing. Now, limited partners are actively seeking exposure to the sector.
Geopolitical Shifts Boost India’s Strategic Appeal
Geopolitical dynamics are working in India’s favor as global investors increasingly look for alternatives to China and Israel in the deep tech space.
Somshubhro Pal Choudhury, co-founder of BIF, highlighted that global investors from the US and Europe are now prioritizing Indian startups in their deep tech portfolio strategies. He credits this shift to India’s stable regulatory environment, strong tech talent, and rising national importance in the global supply chain.
Doraswamy of Ideaspring added that although fundraising remains competitive, the geopolitical situation is giving Indian startups a rare strategic window of opportunity.
Challenges: Exits and Growth-Stage Capital Still Elusive
Despite strong early-stage funding traction, Indian deep-tech startups still face challenges at later stages.
- The long gestation periods associated with deep technologies—which require years of R&D before commercialization—make it difficult to attract traditional growth-stage investors.
- Exit opportunities remain limited. While India has seen a few deep tech success stories, VCs are still waiting for the first wave of large-scale, global breakout companies in sectors like quantum tech, semiconductors, or robotics.
Some investors also point to the negative market sentiment caused by high-profile startup collapses, such as Byju’s and GoMechanic, which have made LPs more cautious. “The questions are not about valuations anymore but about how much you have returned,” said one investor.
Looking Ahead: Scaling Deep Tech with the Right Capital
As India moves into a more innovation-driven economic model, deep tech VCs are stepping up to play a critical role—not just with capital, but with long-term support, mentorship, and commercialization partnerships.
Rajeev Mantri, managing partner of Navam Capital, emphasized that the scale and pace of India’s deep tech startup ecosystem have grown manifold since 2018, and financing must keep pace.
While early-stage funding is becoming more accessible, Mela Ventures’ Krishnakumar Natarajan cautions that growth capital remains a hurdle. He stressed the need for more patient capital and corporate participation to ensure promising startups don’t stall after initial traction.
Conclusion: Deeptech Funding in India Enters a New Phase
Backed by a confluence of government policy, global capital, and deep engineering talent, India’s deeptech VCs are seizing the opportunity to fund the technologies of tomorrow. As the ecosystem continues to scale, the next 2–3 years will be critical in turning potential into performance—and in putting Indian deep tech on the global innovation map.
