India’s deeptech seed deals surge 5.3X in 8 years, lag behind global averages: Report

The average seed cheque size of Indian deeptech deals has grown steadily over the past eight years, increasing 5.3 times between 2016 and 2023, according to a new report titled India’s Deep Tech Revolution.

The report was jointly launched by Speciale Invest, a seed-stage venture capital firm focused on deeptech ventures, in collaboration with Oister Global, a leader in alternative fund investments. 

However, despite this growth, the average Indian seed cheque remains approximately 50% lower than the global average, highlighting the need for further investments to compete globally. 

The report highlighted emerging trends in India’s advancing deeptech space, identifying high-impact sectors spanning green hydrogen, generative AI, advanced manufacturing, space tech, and biotechnology as the primary drivers of this growth. 

“India's deeptech sector is at a defining moment. With cutting-edge innovations across fields like space technology, AI, and green hydrogen, India has the potential to not only transform its economy but also 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 capacity to solve some of the world’s most pressing challenges,” said Vishesh Rajaram, Managing Partner at Speciale Invest. 

Indian startups are leading innovation in critical global sectors, with companies like AgniKul Cosmos pioneering 3D-printed rocket engines, and Newtrace, a leader in green hydrogen solutions. These advancements have positioned India to capture a substantial share of global markets, including a projected 10% of the $700 billion space economy by 2030. 

The report further highlighted the combined impact of government support, academic partnerships, and private investment in shaping the country’s deep tech landscape. Some key government initiatives include the National Deep Tech Startup Policy and financial support programmes from the Biotechnology Industry Research Assistance Council. 

Premier academic institutions, including IITs and IISc, are playing a pivotal role by translating research into commercialised technologies and nurturing a new generation of entrepreneurs to address global challenges.

Private capital is increasingly recognising the potential of deeptech, with corporate investors allocating capital in 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 stated that India is well-positioned to meet the increasing 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 debt. Policymakers should focus on increasing R&D investments, streamlining regulations, and fueling an ecosystem to scale deep tech innovations, it added.