Yali Capital raises $104 million in debut deep-tech fund
The firm had set out to raise ₹ 500 crore with a ₹ 310 crore greenshoe option but managed to raise more than that from its limited partners, which the founders believe is a sign that India's appetite for deep tech is growing.
In fact, the firm raised 78% of its maiden fund from Indian firms and individuals, while the rest was raised from outside sources.
Yali Capital's investor base includes corporate entities like Infosys Ltd, Qualcomm Ventures, Tata AIG General Insurance Co. Ltd, Madhusudhan Kela's Singularity Fund of Funds, Kris Gopalakrishnan's family office Pratithi Investments and notable individuals like ideaForge founders Ankit Mehta and Rahul Singh.
'The involvement of family offices has been a significant tailwind,' said Vishesh Rajaram, managing partner at deep-tech-focused venture capital firm Speciale Invest. 'Their longer capital horizon does make them good partners for deep tech founders. Many are moving beyond traditional sectors, actively co-investing in batteries, space, dual-use defense applications, and more.'
Overall, Yali Capital is bullish on six sectors within deep tech: chip design, aerospace and surveillance, robotics, genomics, artificial intelligence, and smart manufacturing.
The firm is allocating 50% of the fund to chip design and aerospace, while the other 50% will go towards the remaining four sectors mentioned above. The firm's cheque sizes will range from $2 million to $10 million.
'We're allocating 70% of the fund towards early stage (pre-seed, seed and Series A) investments and 30% will go towards late stage (Series D and beyond) companies from the fund,' Yali Capital's founding managing partner Ganapathy Subramaniam told Mint in an interview.
He founded the firm with Mathew Cyriac, the former co-head of Blackstone India PE, which managed $3 billion in assets.
The $104 million fund is the largest deep tech-focused fund to close so far this year. According to private company data platform Venture Intelligence, Endiya Partners and Triton Fund have raised $92 million and $14 million, respectively, in 2025 for their new deep tech-focused funds.
Other than these two, there are five other firms working on raising capital for the sector, including Speciale Invest ($35 million), Mela Ventures ($117 million) and IIMA-CIE's Bharat Innovation Fund II, which is targeting a $150 million fund.
India has only about 50 or so deep tech-focused venture capital firms, according to data from market research and data platform Tracxn.
The largest deep-tech deals happened in 2023, Venture Intelligence data showed. Hyperspectral satellite imaging firm Pixxel raised the most at $36 million, followed by drone startup NewSpace at $33 million and AgniKul Cosmos at $25 million that year.
Yali believes that the government's 2021 Design Linked Incentive (DLI) Scheme to boost semiconductor chip design will help push more and more startups in the chip design and surveillance sectors.
'The DLI scheme is crucial to attract talent back to India to build an Indian chip company. The scheme has a very important role to play,' said Subramaniam.
One of Yali Capital's investments, C2i Semiconductors, a fabless chip company, received DLI approval from the ministry of electronics and information technology earlier in January.
For deep-tech firms such as Yali Capital, entering at the seed and pre-seed stage allows them to exit companies having made a large return on their investment. 'We believe that India's deep tech ecosystem has matured and, as a result, exit cycles have also shifted. An exit in 7-8 years is highly possible,' Subramaniam said.
Yali Capital has made two other investments apart from C2i Semiconductos, robotics startup Perceptyne and oncology genomics startup 4baseCare.
Two more are in the pipeline, with the firm planning to make eight investments by the end of the year. Overall, through the fund's lifecycle, the firm plans to make 18 investments: 15 early-stage startups and three late-stage startups.
While entering late-stage startups, Yali Capital plans to put in at least $10 million, mostly targeting primary deals and not secondaries. 'If I stay with my late-stage investments for two to three years, then I will almost return the entire capital to investors,' said Subramaniam.
Traditionally, deep-tech firms need to give their investments time to mature since timelines for their portfolio companies are longer than traditional bets in sectors like fintech or consumer tech. On average, deep tech startups take between 9 to 10 years to really get going, having spent the years prior investing in their intellectual property and technology.
Many investors in the deep-tech sector allude to a phenomenon called the 'Valley of Death', where startups achieve proof-of-concept of their ideas but fail to commercialize them, making it harder for them to get funding after a Series A round.
'What's been missing in deep tech has been scale and monetization because startups haven't found enough domestic customers yet. The government as a customer is still a new phenomenon. Once these patterns are better established and deep-tech firms start generating predictable revenue like peers in SaaS or fintech, growth capital will become available," said Pranav Pai, founding partner and chief investment officer at3one4Capital.
Speciale Invest's Rajaram highlighted the need for more patient capital at the Series B and C stage from sovereign funds and corporate VCs, public procurement and anchor customers, and more policy-enabled demand aggregation, similar to the government's Innovations for Defence Excellence programme.
'Bridging this gap is not just about helping startups survive—it's about enabling India to build sovereign capabilities in areas that matter for the future," he said.
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