The DeepTech Startup Ecosystem
Shubham Yadav
Senior Talent Acquisition Specialist | Tech, SaaS, FinTech & Digital Lending Hiring | Building High-Performing Teams
India's DeepTech ecosystem is rapidly expanding, with over 3,600 startups operating in this domain. According to a recent study by Nasscom and Zinnov, India currently ranks sixth globally in the DeepTech sector.
Of the 3,600 deeptech's over 480 deeptech startups were established in CY23 alone, which is two times higher than 2022, the report titled ‘India's deeptech dawn: forging ahead’ said.
The report added that over 100 were deeptech firms, which have developed intellectual property or innovative solutions in new domains.?
Artificial Intelligence (AI) has emerged as a primary area of focus, with 74% of the DeepTech startups founded in 2023 concentrating on AI-related technologies. This represents a significant increase from the 62% focus on AI observed between 2014 and 2022.
Despite India's strong reputation for AI talent and its large pool of developers, the country is currently ranked sixth in the global DeepTech ecosystem. To ascend into the top three, several strategic priorities need to be addressed. These include enhancing access to patient capital for DeepTech startups, fostering robust research and development (R&D) partnerships with academic institutions, streamlining government procurement processes to support India-specific solutions, and implementing the DeepTech policy introduced in 2023.
According to the CY23 report, Indian deeptech startups witnessed a dip of 77 per cent in funding compared to the last year and secured $850 million in investments.
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“Both early and late-stage deals have witnessed a reduction of over 60 per cent this year. This downturn is attributed to smaller average investment sizes at both the seed and late stages and investors remaining cautious largely due to the extended gestation periods typical of these ventures. 31 M&A deals were reported in CY2023, a decline of about 45 per cent as focus shifted to accelerate tech capabilities that provide the AI edge,” it added.
The report identifies four sectors of strategic importance for DeepTech in India: space and defense, healthcare, automotive, and industrial manufacturing. Within these sectors, over 500 startups are actively developing solutions, including advancements in electrification, industrial robotics, surveillance and drones, satellite imagery, propulsion systems, and cancer diagnostics. These areas are crucial to the continued growth and success of India's DeepTech ecosystem.
Shubham, your note on the rising DeepTech ecosystem in India, especially AI-driven innovation, is timely and pivotal. Highlighting both the challenges and opportunities in this dynamic space provides valuable insights into the evolving landscape of technology in India. This focus was also a topic of discussion at a recent G.I.L.C. gathering, where the growth of DeepTech and its potential impact on various industries were extensively explored. Understanding these elements is crucial for stakeholders looking to engage with or invest in this burgeoning sector. For those interested in deepening their knowledge of DeepTech trends and networking with industry experts, attending the upcoming G.I.L.C. Summit can be highly beneficial. For more information and to register for the event, go to: https://gilc.club/events