Deeptech rising: How Indian startups can go from research labs to global markets

While India’s deeptech ecosystem is full of potential, it currently grapples with funding challenges. At Prosus Luminate, entrepreneurs Kunal Shah, Mukesh Bansal, and Shradha Sharma came together to discuss how the sector’s true strength lies in compounding talent, ideas and markets. 

Once a niche within the broader startup landscape, Deeptech is now emerging as a critical pillar of the country’s innovation economy. With nearly 4,000 deeptech startups spanning areas such as artificial intelligence, quantum computing, robotics, space tech, and biotech, India is cementing its place as a global innovation hub.

According to Nasscom's 2024 report, India's Deeptech Dawn, cumulative global VC investments in deeptech reached $590 billion in 2023, a year that saw the number of new startups more than double compared to the previous year. Once confined to research labs, these startups are now attracting serious global attention and capital. A 2024 report by Nasscom and Zinnov noted that funding in Indian deeptech grew by a staggering 78%, compared to 2023. And yet, the ecosystem stands at an inflection point—brimming with potential and talent, but still grappling with funding gaps and limited industry-academia collaboration. 

These questions around opportunity, scale, and India’s role in shaping the next wave of global innovation were central to the discussions at the inaugural event of Prosus Luminate, a flagship global series. Through this platform, Prosus aims to bring together leading voices in technology, entrepreneurship, and business to discuss and shape the future of technology, commerce, and capital.

Ashutosh Sharma, Head of India Ecosystem, Prosus, kicked off the day with a strong call to action, backed by a powerful vision. “The new order of the global economy will not be decided by textiles, gemstones, spices, armies or navies, it will be decided by code, capital, and conviction. The question is not whether India will deliver on this promise, it's when. And that answer lies with India’s entrepreneurs, visionaries and innovators”.

What is holding India back from deeptech dominance?

Mukesh Bansal, Founder, Cure.fit, Nurix, and Myntra and Kunal Shah, Founder, CRED joined Shradha Sharma, Founder and CEO, YourStory Media, to discuss India’s deeptech outlook. Their panel was aptly titled ‘Digital Dharma - Charting India’s path to tech superpower startups’.

“Despite promising moves like the Anusandhan National Research Foundation Act 2023 which committed Rs 50,000 crore to deeptech research and the IndiaAI mission’s $1.2 billion investment, India lags in the global deeptech race,” Shradha said.

Bansal concurred, “We are definitely behind; the GPT movement happened in 2021 and everyone started to wake up. But OpenAI started in 2015…[if] we had started the deeptech focus in 2015, and not in 2024-25, we probably would have caught up.”

Yet he remained optimistic about the road ahead, particularly on account of India’s talent density. ”One-fourth of all AI engineers and chip designers in the world are based in India,” he noted. The challenge isn’t know-how, but the lack of a supportive ecosystem. Deeptech startups need longer incubation phases, access to markets, and patient capital. He estimated it would take another five years to truly unlock India’s potential in deeptech. 

Shah echoed this optimism around talent, but revealed some sobering numbers, including India’s per-capita income of just $2,500 (until 2024) and low female labour force participation. 

“My worry is that by trying to chase everything, are we doing what is needed for the country? Our focus should be to level up our talent,” he said. He added that a comparison with other nations was harmful, advising that India should focus on improving its deeptech capabilities by 20-30% and allow the compounding effect to take over. 

Is funding a fundamental problem for deeptechs?

In 2024, Indian deeptech startups received $1.6 billion in funding, a 78% increase from 2023, according to Nasscom. The government is planning additional support this year via a Rs 10,000 crore Fund of Funds scheme to boost deeptech startups. Additionally, the Startup Policy Forum has launched #100DesiDeepTechs, a nationwide initiative to identify and support a hundred promising deeptech startups in the domains of semiconductors, defence technologies, green hydrogen, space technologies, biotechnology, robotics, electric vehicles and more.

But the question remains: Is it enough? 

Bansal said early-stage funding remained accessible, especially for credible entrepreneurs with strong pitches and early traction. The bigger problem, he said, lies in access to international markets and sustaining through Series B or C rounds. Deeptechs require years of research and development, and often compete with trillion-dollar companies. Bansal emphasized that the government should prioritize procuring deeptech resources and infrastructure.  

Shah agreed. “The capital will follow,” he said. According to him, the problem is not funding, but building businesses that promise strong returns. He emphasized the importance of traction, growth, and a clear roadmap to attract growth-stage capital. 

Fabricio Bloisi, CEO of Prosus echoed the sentiment, saying, “For Prosus, India is a big priority. We have already invested nearly $9 billion and we have more. Everything starts with thinking big and opening your mind to an exponential future.” There is clearly a lot riding on Indian entrepreneurs who are ready to take up the gauntlet. India is one of the three focus ecosystems for Prosus, the other two being Latin America and Europe.

Is longevity a measure of success for startups in India?

Shradha pivoted the conversation to the topic of scalability and growth. While India has witnessed record-breaking growth in terms of IPOs in 2024, she pointed out that in India, “every number is a big number.” She asked Shah and Bansal, who are also active investors, if they could qualify the real growth opportunity in India. 

Shah put scalability into perspective, sharing that while India is a $4 trillion economy, only 200-250 companies report $100 billion profit after tax. Of these 250, 100 dominate the market cap, with a few business groups leading the overall list. 

He added that AI will be a gamechanger, reshaping different industries in unanticipated ways. AI will also reshape scalability, as the powerful technology is already shrinking the shelf lives of companies. He advised entrepreneurs to reach for global maxima, instead of simply aiming for hyperlocal success.   

Bansal shared that in the last 15 years of startup growth, India has gone from celebrating a $1 billion valuation to raising $1 billion, and then hitting $1 billion in revenue. “I think we need to start celebrating getting to $1 billion profit and then compound from there on. That is real staying power,” he said. 

He challenged the notion of the 10-year VC cycle, adding that it’s too short for deeptech. The focus instead must be on transitioning into the mindset of longevity.

Shah said all companies are a function of the market they operate in. “Unless we raise per capita income, startup ambitions will remain limited,” he said. He also highlighted the dangers of brain drain as the pace of global innovation speeds up. 

Bansal shared his enthusiasm about India’s young demographic and consistent GDP growth, both of which will continue to compound in the future.