Deeptech VCs spot big funding momentum on government, geopolitical push

Time of India

19-06-2025

Indian deeptech funds
such as Speciale Invest, Ideaspring and Mela Ventures are raising fresh funds to step up investments as more companies come in this space on the back of government initiatives, favourable geopolitical landscape and rapid technological advancement.
ET has learnt that Java Capital is looking to up their fund size from Rs 50 crore to Rs 250 crore while Bharat Innovation Fund (BIF) is looking to raise $150 million, or about Rs 1,290 crore, for its second fund, according to media reports.
Navam Capital is raising its maiden fund of $30 million, or about Rs 258 crore. Speciale Invest has closed its third fund but did not respond to ET's query on the closure.
Ideaspring Capital and Mela Ventures are raising their third and second fund, respectively.
ETtech
Naganand Doraswamy, managing partner at Ideaspring Capital, said the new fund size is likely to exceed Rs 265 crore it had raised for the second fund.
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Mela Ventures had raised Rs 320 crore in its first fund.
The deeptech ecosystem in India is seeing a growth momentum with several startups in sectors like
artificial intelligence
(AI), spacetech, semiconductors, robotics and climate tech, increasing the competition for early-stage deals.
According to data from
Venture Intelligence
, investments in deeptech doubled in the first four months of 2025 to $324 million across 35 deals against $156 million from 21 deals in the same period last year.
ETtech
In India's favour
Ideaspring's Doraswamy told ET that while fundraising is still tough, the current geopolitical situation is playing in favour of India's startup ecosystem.
Another deeptech investor explained that India is a top choice for global deeptech investors from the US and Europe, with many favouring India over China and Israel.
Vinod Shankar, co-founder at Java Capital, said raising funds has become much easier than before. When they started in 2020, the fund had to explain to limited partners (LPs) what they are doing, he said.
Rajeev Mantri, founder and managing partner of Navam Capital, who has been investing in the ecosystem since 2008, said that compared to five years ago, the velocity and scale of the ecosystem has grown manifold and it requires more financing support.
Navam Capital, which has invested in Ather Energy and spacetech startup Agnikul Cosmos, will continue to focus on sectors such as aerospace, semiconductors, robotics and climate tech, he said.
Challenges remain
While investors are more open than before, raising funds is not easy as deeptech has a longer gestation period and fewer examples of successful exits, fund managers said.
The deeptech investor cited above noted that India is yet to see breakout deeptech companies. 'Once that happens, we will have a lot of capital flow in the ecosystem,' he said.
In addition, he said shadows of downfall of much celebrated startups such as GoMechanic and Byju's haunt the startup world, creating negative sentiments. 'The questions are not about valuation but about how much have you returned,' he added.
Krishnakumar Natarajan, managing partner at Mela Ventures, said while there is early stage capital available, growth stage continues to be a challenge for deeptech startups.