Surge in Indian Deeptech Investments: Why Numbers Don’t Match the Perception

There is a perception of innovation being limited in Indian deeptech ecosystem, especially after Union Minister Piyush Goyal’s comments on the lack of technological innovation by start-ups. But numbers paint a completely different picture about the same. According to Venture Intelligence data, as quoted by The Economic Times, investments in deeptech surged to $324 million across 35 deals in the first four months of 2025.

This shows a two-fold increase in deeptech investments from the same period in 2024, which saw $156 million funds through 21 deals. Some of the biggest deals of 2025 include $90 million funding in Netradyne (AI-based fleet management platform), $54 million in SpotDraft (AI-based contract management firm), $35 million in Infinite Uptime, and $21 million in Tonbo Imaging.

In addition, a Pune-based deeptech start-up ‘Sedeman Mechatronics’ has started preparations to launch its IPO (initial public offering) this year. The start-up, incubated at the Indian Institute of Technology-Bombay (IIT-B), is expected to raise funds between Rs 800 crore and Rs 1,000 crore.

And a Nasscom report even revealed that India ranks sixth among the top nine deeptech ecosystems globally with 3,600 such start-ups.

Challenges Still There

Despite recent surge in investments, industry experts believe that the sector still faces various challenges like regulatory hurdles, limited early-stage capital for deeptech, and a maturing ecosystem that is still catching up with global peers.

“Building deep tech in India takes time and substantial capital. For example, semiconductor startups require an initial investment of around $10 million just to begin development. In India, most seed funding caps out at $2 million, which limits what startups can achieve in the deeptech space,” Anil Joshi, managing partner at Unicorn Ventures, told Outlook Business.

Besides funding, Joshi believes that another key hurdle lies in consumers’ paying capacity. While India’s tech adoption in increasing, but the country still has a gap in willingness to pay for technology solutions compared to overseas markets, he said.

On the other hand, former KPMG India Head Sreedhar Prasad asserted that many Indian investors are still tuned to evaluating consumer internet or fintech players.

“We lack experienced technology investors who can recognise the potential of deep tech from the get-go. I know Indian tech companies that are more mature than their US counterparts but struggle to raise capital. Meanwhile, a younger rival abroad raises $100 million at an $800 million valuation,” he asserted, while calling for the need of “bold investors” who understand tech deeply in India.

Reforms Required

To resolve these issues, Pi Ventures managing director Sohil Bhagat suggests that the government should be first consumer of Indian deeptech products. “This has started happening through IDEX and similar programs, but we need government procurement to open up more and to try more pilots with start-ups,” the VC stated.

Prasad echoes similar sentiments, saying the first customer has to be the Indian government. “When the government validates the product, other countries like UAE, Saudi Arabia, UK, and others will follow. Without that, global trust is hard to earn,” he said, while adding that the four pillars --- money, regulation, talent, and technology --- have to move fast to compete.

 “The infrastructure required to develop deep tech start-ups in India is essential, but so is the acceptance of home-grown products. If we can create products locally, the Indian market needs to support these innovations rather than relying solely on foreign-made goods,” said Joshi.

Not only government, the entire ecosystem needs to come together, including founders, research institutes; policies like National Quantum Mission, INSPACe policy for Space Tech, DLI & PLI schemes for hard tech areas, and private capital availability, said Arjun Rao, general partner at Speciale Invest.

The latest numbers in the Indian deeptech sector suggest improvement, yet some gaps like bold capital, procurement bottlenecks continue to drag innovation potential. If India is to lead in advanced technologies rather than merely follow, critical interventions are no longer optional — they are urgent.