The average seed check size of Indian deeptech deals has grown steadily over the past eight years, rising 5.3 times between 2016 and 2023, according to a new report titled India’s deep tech revolution.
The report was issued jointly by A seed-stage venture capital firm focused on deeptech ventures in collaboration with Oyster Global, a leader in alternative fund investments.
However, despite this growth, the average Indian seed inspection remains around 50% below the global average, highlighting the need for further investment to compete globally.
The report highlights emerging trends in India’s advanced deep technology space, identifying emerging high impact areas with green hydrogen, generative AI, advanced manufacturing, space technology, and biotechnology as the primary drivers of this growth.
“India’s deeptech sector is at a defining moment. With cutting-edge innovations in areas such as space technology, AI, and green hydrogen, India has the potential to not only transform its economy but become a global leader in science and engineering-driven solutions. As we continue to invest in and support pioneering startups, we witness firsthand the country’s ability to solve some of the world’s major challenges,” said Vishesh Rajaram, managing partner of Vishesh Investments.
Indian startups are leading innovation in critical global sectors, such as companies Pioneering 3D-printed rocket engines, and Nutrace, leading green hydrogen solutions. These advances have positioned India to capture a substantial share of the global market, with an estimated 10% of the $700 billion space economy by 2030.
The report further highlights the combined impact of government support, academic partnerships and private investment in shaping the country’s deep tech landscape. Some of the major government initiatives include the National Deep Tech Startup Policy and financial support programs from the Biotechnology Industry Research Assistance Council.
Leading academic institutions including IITs and IISc are playing a pivotal role by translating research into commercialized technologies and nurturing a new generation of entrepreneurs to address global challenges.
Private capital is increasingly recognizing the potential of deeptech, with corporate investors allocating capital to industries such as energy, healthcare, and manufacturing.
However, deeptech startups in India face challenges such as high capital intensity, technology validation, and market adoption risks. The report further states that India is well positioned to meet the growing global demand for sustainable energy solutions such as green hydrogen, making it a key player in the global energy transition.
The report also advised founders and investors to explore differentiated funding models such as non-dilutive capital in the form of grants and loans. Policymakers should focus on increasing R&D investment, streamlining regulations and fueling the ecosystem to scale deep technological innovations, it added.