- India’s deeptech start-up ecosystem has doubled in growth since 2022, with over 480 new start-ups established in CY2023.
- 74% of the new deeptech start-ups in 2023 are focused on AI, a significant increase from previous years.
- Despite a funding crunch, Indian deeptech start-ups secured $850 million in investments in CY2023, with AI start-ups receiving the majority share.
- The report highlights strategic sectors like space and defense, healthcare, automotive, and industrial manufacturing where over 500 start-ups are developing innovative solutions.
- Growth in emerging hubs for deeptech start-ups is observed, with 110+ start-ups established in these areas in 2023, driven by talent pool expansion and supportive ecosystems.
India Deeptech Startups: Navigating Growth Amid Funding Challenges
In recent years, India has emerged as a hub for deeptech start-ups, showcasing remarkable growth and innovation in the technology sector. According to the latest report by Nasscom, the number of deeptech start-ups in India has more than doubled since 2022, with over 480 new ventures established in CY2023. This surge in deeptech start-ups highlights the country’s potential to drive technological advancements and develop cutting-edge solutions across various domains.
Challenges in the Funding Landscape
Despite the impressive growth of deeptech start-ups, the sector has faced challenges in securing adequate funding. In CY2023, Indian deeptech start-ups received $850 million in investments, marking a significant decline of 77% compared to the previous year. This decrease in funding can be attributed to various factors, including smaller average investment sizes, cautious investor sentiment, and extended gestation periods for deeptech ventures.
The funding crunch has impacted both early and late-stage deals, with a reduction of over 60% in investments across the board. However, it is noteworthy that AI start-ups have managed to secure a majority share of the available funding, demonstrating the continued interest in artificial intelligence technologies within the deeptech ecosystem.
Related Video
Emerging Trends and Sector Focus
Despite the funding challenges, the Indian deeptech start-up ecosystem is witnessing several emerging trends and sector-focused innovations. The report highlights a strategic focus on sectors such as space and defense, healthcare, automotive, and industrial manufacturing, where over 500 start-ups are developing solutions ranging from electrification and industrial robotics to cancer diagnostics and satellite imagery.
Moreover, there has been a notable shift towards building sector-specific solutions that leverage advanced technologies like AI and robotics to address industry-specific challenges. This trend reflects the growing maturity and specialization of deeptech start-ups in India, indicating a shift towards more targeted innovation and problem-solving approaches.
Key Areas for Accelerating Growth
Kritika Murugesan, Head of Nasscom Deeptech, emphasizes the importance of addressing key areas to propel India’s deeptech start-up ecosystem to the top tier globally. These areas include access to patient capital for scaling products, fostering strong R&D partnerships with academia for continuous innovation, streamlining government procurement processes for start-ups to develop India-centric solutions, and implementing the DeepTech Policy proposed in 2023.
By focusing on these critical areas, India can enhance its position in the global deeptech landscape and pave the way for sustained growth and innovation in the technology sector. Despite the funding challenges, the resilience and ingenuity of Indian deeptech start-ups continue to drive the sector forward, positioning the country as a formidable player in the global technology space.
Links to additional Resources: