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DeepTech: Closed-door Policy Roundtable on DeepTech Fund
DeepTech: Closed-door Policy Roundtable on DeepTech Fund

May 5, 2025

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On April 3, we organised a closed-door roundtable discussion on the sidelines of Startup Mahakumbh 2025, on creating a truly world class accelerator program for DeepTech start-ups in India. The roundtable comprised key government officials from MeitY, DST, BIRAC, PSA office and investors including IAN Alpha Fund, Peak XV, SEA Fund, GrowX Venture, and Bharat Innovation Fund. The focus of the discussions was to build upon the Union Budget 2025’s allocation of ₹20,000 crore, focusing on operationalising funding and strengthening India’s innovation ecosystem.

Some of the key takeaways of the discussion are as follows:

  1. The discussions brought to fore the ongoing paucity of patient capital of patient capital for DeepTechs in India. It was highlighted that a corpus of 7000 Crore available with Meity and DST may be readily available for deployment for DeepTechs.
     
  2. A Techno-Commercial Readiness & Market Maturity Matrix developed by NITI Aayog was suggested to be used as reference for evaluating the eligibility of start-ups.
     
  3. Recommendations included identifying startups into two tracks – first, Commercial Segment (EV batteries, space technology, biotech, and selective AI) and second, Strategic Segment (Defence tech, Agri-biotech, Vaccines, Quantum computing, and Climate materials).
  4. Exploring the possibility of a focussed Acceleration Program for high potential eligible DeepTech start-ups was also discussed. For identifying this pool, a panel of external experts with proven expertise in technology, investment, and relevant industries may be constituted.
  5. The problem of Low Ticket sizes was highlighted and discussed at length. It was highlighted that 80% of the DeepTech deals happen at the seed stage, indicating an asymmetry in the investment pipeline. While the average seed funding size of Indian DeepTech has increased it remains at ~ 50% of global average. Therefore, Investment ticket sizes should range between ₹50–200 crore to match global standards and cater to the capital-intensive needs of DeepTech startups.
  6. It was agreed that DST funding should bridge the funding vacuum between seed and Series C by keeping a vigilant eye on Series A and B investments—phases often underserved by current schemes.
  7. Beyond the funds earmarked for investments into the start-ups (say the Rs 5000 crore from DST and the Rs 2000 crore from MEITY) the government should have an additional goal  to deploy funds to establish and nurture approximately 10 world-class academic incubators.
  8. It was agreed that SEBI registered AIFs/ daughter finds remained a successful Investment model for channelising patient capital towards DeepTech. The new FoF may mandate AIFs to invest a significant share in DeepTech startups. Some flexibility may be allowed for adjacent or non-DeepTech sectors to ensure financial sustainability and risk mitigation.
  9. It was suggested to the government that DeepTech FoF should act as an anchor investor by deploying capital upfront to instil confidence and reduce risk perception among private venture capitalists. 
  10. Co-investment structures for direct investment alongside private investors in selected DeepTech startups should be explored along with FoF model. This could be done along with a healthy mix of equity, debt and other instruments for wider public sector participation.

Please refer to the attachment to read the detailed outcome report. For further information, please write to swapnil@nasscom.in with a copy to policy@nasscom.in.

 

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20250414_Meeting Report - Policy Roundtable for DeepTech Accelerator 3rd April 2025.pdf

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