Deep Tech Founders Must Prioritise Business Fundamentals, says NSRCEL Chairperson 

Let me begin with some context. NSRCEL is one of India’s oldest incubators, with over 25 years of experience. We are sector-agnostic, supporting founders across a wide range of domains.

From both our experience and broader ecosystem trends, it is evident that deep tech is gaining real momentum. To understand why, it’s useful to look at the evolution of India’s startup landscape.

The first wave, in the mid-2000s, saw companies like Flipkart and Ola build by adapting proven global business models to Indian conditions. While there was strong contextual innovation, the core technology was largely off-the-shelf.

The second wave, post-2012, was driven by rapid internet and smartphone penetration, significantly accelerated by Reliance Jio. This phase enabled the rise of large-scale digital platforms and e-commerce businesses, again relying primarily on existing technologies rather than creating new ones.

Today, that opportunity space is largely saturated. Much of the “low-hanging fruit” has already been captured. As a result, founders are increasingly being pushed to go deeper tackling more complex, technology-led problems. This is where deep tech emerges as a natural next phase.

Three structural drivers underpin this shift. First, the saturation of earlier models is forcing innovation beyond existing technological frameworks. Second, post-pandemic geopolitical shifts have highlighted the importance of technological self-reliance. Third, the entrepreneurial ecosystem itself has matured, with founders now aspiring to build at the frontiers of innovation rather than replicate existing models.

We are also seeing a new wave of second-time founders, such as Deepinder Goyal, exploring more ambitious, “moonshot” ideas.

Deep tech, therefore, is not a passing trend; it represents a structural shift. That said, the space is still at an early stage and far from fully mature.

I believe the traditional notion of brain drain is already evolving. We are increasingly seeing reverse migration, with global talent choosing to return and build in India. For instance, startups like Sarvam AI reflect this shift, with founders bringing international experience back to the domestic ecosystem.

To sustain and accelerate this trend, the focus must be on reducing structural friction making it significantly easier for founders to access grants, capital, and high-quality research infrastructure. If these pathways remain cumbersome, entrepreneurs will inevitably look to more enabling ecosystems abroad.

That tension has always existed. Large technology companies such as Google, Microsoft, and Anthropic can typically offer higher and more stable compensation.

Startups, however, compete on a different value proposition offering ownership, a greater sense of impact, and the possibility of outsized long-term financial returns. While this path may not appeal to everyone, there will always be a meaningful segment of talent willing to take that bet.

It’s not entirely a misconception ecosystems like Silicon Valley are still ahead in terms of maturity and frontier innovation.

However, India does not need to replicate Silicon Valley to succeed. The more relevant question is what problems are being solved. If founders are addressing uniquely Indian challenges, building from India offers a clear advantage in terms of context and proximity. For globally relevant problems, on the other hand, geography is increasingly less of a constraint.

Robotics can be seen as the physical manifestation of AI, but its progress is constrained by a different set of challenges. The real bottleneck is not intelligence, it's manufacturing.

India has a strong edge in software, but robotics depends heavily on hardware capabilities, supply chains, and production infrastructure. To compete effectively, the country needs to significantly improve ease of manufacturing, streamline regulatory approvals, and build robust industrial ecosystems that can support hardware innovation at scale.

India’s strongest deep tech potential lies in areas where it has built long-term institutional and industrial capabilities.

Space technology is a clear example, driven by decades of investment and expertise from ISRO. Similarly, biotechnology benefits from a strong foundation in chemistry and pharmaceuticals, with companies like Biocon demonstrating global competitiveness.

Semiconductors, however, remain a relative challenge. Despite growing policy focus, India is still in a catch-up phase and will need sustained investment and ecosystem development to compete at scale.

Not quite. Deep tech is far broader in scope, it spans AI, biotechnology, semiconductors, sustainability, and more. Unlike SaaS a decade ago, which was a relatively well-defined category, deep tech represents an entire spectrum of innovation rather than a single trend.

The more fundamental challenge lies in funding alignment. Traditional venture capital operates on a 10–12 year cycle, whereas deep tech ventures often require 10–15 years to fully mature. This mismatch creates structural friction.

The most difficult phase is the middle stage between early prototypes and market validation. At this point, startups need sustained, ‘patient capital’ to bridge the gap, which typically comes from government support, grants, and long-term institutional funding rather than conventional VC alone.

One of the key constraints is a lack of business orientation. Many deep tech founders are deeply focused on technological innovation but often underemphasise market fundamentals; pricing, demand, distribution, and viable revenue models. Technology by itself is not enough; it must translate into a sustainable, scalable business.

Three priorities stand out. First, access to patient capital that can support long development cycles. Second, improving the ease of doing business particularly for manufacturing and hardware-led ventures. Third, fostering stronger market orientation among founders so that innovation is closely aligned with real-world demand.

The government also has a critical role to play on three fronts: as an investor providing long-term capital, as a policymaker creating enabling regulations, and as an early customer that can help validate and scale emerging technologies.

It’s difficult to predict when or how it will happen. Often, a single breakout success can transform an entire ecosystem much like in sports, where one landmark achievement creates a ripple effect. India already has a pipeline of promising startups; what it needs is that one defining global success story to catalyse the ecosystem.

Failure, on the other hand, would mean remaining overly dependent on foreign technologies rather than building strong domestic capabilities. That makes it critical for India to invest consistently in indigenous innovation and technological self-reliance.

At the same time, the conversation around AI and deep tech needs to move beyond hype toward responsible and ethical adoption particularly in sensitive areas like education and society.

Academia plays a central role in this journey. Institutions such as Indian Institutes of Technology (IITs) and Indian Institute of Science IISc)  are at the forefront of deep tech research, while NSRCEL focuses on translating that research into viable businesses.

Ultimately, the real challenge is not just building cutting-edge technology, but successfully taking it from the lab to the market.