India’s Deeptech Funding Crosses $11 Bn As Investors Turn To AI, Semiconductors

India’s deeptech sector has attracted close to $11.4 billion in cumulative private equity and venture capital investment between 2015 and 2026 YTD, with 2025 emerging as the strongest year on record, according to the Bharat DeepTech Report 2026: From Lab to Leadership released by the Indian Venture and Alternate Capital Association (IVCA).

The report said deeptech investment has grown sharply since 2016, even as funding across the broader Indian startup ecosystem slowed. AI and generative AI, along with electric vehicle and battery technologies, accounted for a significant share of capital deployed.

Semiconductors, Spacetech Gain Investor Attention

Semiconductors and spacetech emerged as the fastest-growing deeptech segments, pointing to increasing investor interest in strategic and industrial technologies, the report said.

Bengaluru continued to dominate India's deeptech investment landscape, accounting for around half of all deals and funding. At the same time, Ahmedabad, Kochi and Kolkata are emerging as alternative deeptech hubs.

The IVCA DeepTech Fund Survey found that investor participation was highest in AI/generative AI and Enterprise DeepTech/SaaS, followed by spacetech and defence.

Series B/C Gap, Exit Challenges Remain

Despite growing investor interest, the sector continues to face a funding gap beyond the seed stage. The survey found that fund participation drops sharply at the Series B/C stage, while fewer investors are able to provide larger cheques to growth-stage companies.

IVCA President Rajat Tandon said deeptech would require “capital that is patient, appropriately structured, and available across the entire growth journey.” He added that addressing the Series B/C gap, increasing domestic limited partner participation and improving exit opportunities would be important for building globally competitive deeptech companies.

Exit visibility was identified as the biggest challenge by survey participants, followed by the long gestation periods required to develop and commercialise deep technologies. However, the report noted that exit activity improved in 2025, with deal counts and values rising and secondary sales delivering the strongest average returns over the past decade.

The report also highlighted gaps in access to government capital. While schemes such as the RDI Scheme, SIDBI Startup India Fund of Funds 2.0 and the India Semiconductor Mission are available, 40% of surveyed funds had not engaged with any government capital vehicle.

The report combines IVCA-Venture Intelligence deal data from 2015 to 2026 YTD with responses from 100 funds covered by the IVCA DeepTech Fund Survey 2026.