Mid-Sized VCs Are Moving Deeper Into Indian Deeptech — and They’re Changing How They Pick Startups
India’s deeptech startup ecosystem is attracting a broader class of venture investors. Mid-sized VC firms that traditionally invested across sectors are increasing their exposure to startups working in areas such as semiconductors, defence technology, climate tech, aerospace, robotics and advanced artificial intelligence. The change is also forcing investors to rethink their diligence process: firms including Antler, Kae Capital, Bessemer Venture Partners and others are building networks of technical experts and external advisers to evaluate businesses based on complex science and engineering. Venture Intelligence data cited by The Economic Times shows Indian deeptech startups have raised $574 million across 61 deals in 2026 so far.
What is changing in India’s venture capital market?
Deeptech investing in India was once largely associated with specialist funds willing to accept long development cycles, hardware risk and uncertain commercialization timelines.
That boundary is becoming less clear.
According to The Economic Times, established mid-tier, sector-agnostic VC firms are now increasing their deeptech exposure. Antler, Bertelsmann India Investments, Jungle Ventures, Bessemer Venture Partners and Kae Capital are among firms building greater expertise around technically demanding investments.
Antler is reportedly reviewing seven to eight deeptech startups each month, compared with roughly one previously.
Bertelsmann India Investments, meanwhile, plans to make one or two deals annually across areas including climate tech, defence technology, semiconductors and artificial intelligence.
The shift matters because it widens the potential pool of capital available to founders who previously depended heavily on specialised deeptech investors.
Deeptech funding has already reached $574 million in 2026
Venture Intelligence data cited by ET shows that deeptech startups raised $574 million across 61 transactions in calendar 2026 so far.
That is equivalent to about 84% of the $679 million invested across 94 deals during all of 2025.
Large rounds have helped push up the 2026 total.
The dataset cited by ET includes a $100 million round for satellite-imaging company Pixxel and $60 million for Skyroot Aerospace, which the publication said made Skyroot India’s first spacetech unicorn.
The data does need context.
Different research firms classify “deeptech” differently. A separate analysis published by Mint recently estimated that Indian deeptech startups had raised around $2.3 billion across nearly 200 deals in 2026, compared with $1.62 billion across 453 transactions in 2025. Those figures are substantially higher than Venture Intelligence’s dataset, which means the two should not be treated as directly comparable.
The safest conclusion is therefore not that one figure represents the definitive size of Indian deeptech funding, but that multiple datasets point to rising investor activity and larger rounds.
Why generalist VCs need a different playbook for deeptech
Investing in a consumer app and investing in a semiconductor company require very different forms of due diligence.
A conventional software startup can often be assessed through metrics such as monthly revenue, customer acquisition cost, retention and unit economics.
A deeptech company may instead require investors to answer questions such as:
Does the underlying science work?
Can the prototype be manufactured at commercial scale?
Is the intellectual property genuinely defensible?
What certification or regulatory hurdles remain?
How long will commercialization take?
Is the technical team capable of moving from laboratory validation to industrial production?
That is why investors are adding specialist expertise.
ET reports that Antler, Kae Capital and Bessemer Venture Partners are building internal expert networks and using external advisers to evaluate complex businesses. Bertelsmann and Bessemer are also tapping global networks. Even larger VC firms are considering bringing academics and specialists into the evaluation process as AI increasingly overlaps with areas such as biology and physics.
This is potentially one of the most consequential changes in the sector.
More money alone does not solve deeptech’s funding problem. Investors also need the technical confidence to distinguish breakthrough science from technology that cannot be commercialised economically.
Why deeptech has become more investible now
Several factors are making the sector more attractive.
First, more Indian deeptech companies are reaching a stage where investors can assess real customer demand rather than just prototypes.
Mint reported that growth investors are increasingly encountering deeptech companies with established revenue streams, some visibility into unit economics and more predictable expansion.
Second, large domestic and global markets are opening up in sectors where Indian startups are active.
Redseer Strategy Consultants estimated India’s deeptech opportunity at around $9–12 billion in FY2025, with the potential to reach approximately $30 billion by 2030. The report identified defence innovation and robotics among the major growth drivers.
That forecast is an industry estimate rather than a guaranteed market outcome, but it helps explain why investors are spending more time on the category.
Defence, semiconductors and robotics are expanding the opportunity
The new wave of Indian deeptech investment is not centered on a single technology.
Investor interest spans:
Defence and aerospace: India’s push for domestic defence production and private participation is creating potential customers for autonomous systems, sensors, drones, propulsion and communications technologies.
Semiconductors: Government incentives and efforts to build domestic electronics manufacturing have increased investor attention on chip design, semiconductor equipment and related technologies.
Space technology: Regulatory reforms and increased private participation have created a larger commercial space ecosystem.
Robotics and advanced manufacturing: Global companies are increasingly looking for automation systems and diversified manufacturing supply chains.
Artificial intelligence: AI is also crossing into physical industries, including robotics, life sciences, industrial automation and defence, creating companies that combine software with hard engineering.
Redseer estimates the global robotics-machines market could grow from around $60 billion to nearly $230 billion by 2030, while identifying autonomous systems and AI-enabled technologies among India’s immediate opportunities.
Government capital is reducing part of the financing gap
Private VC interest is also growing alongside a significant expansion of government-backed capital.
India’s Research, Development and Innovation Fund has a total budget of ₹1 lakh crore.
According to the Department of Science and Technology, the scheme is designed to support private-sector R&D in strategic and emerging technologies through long-term financing, equity investment and contributions to a Deep-Tech Fund of Funds. Financing can cover up to 50% of assessed project costs for eligible transformative R&D projects at Technology Readiness Level 4 and above.
The government has also operationalised Startup India Fund of Funds 2.0 with a ₹10,000 crore corpus. Its priority areas include deeptech startups, technology-driven manufacturing and smaller funds supporting early-growth companies.
That structure matters because deeptech startups often need significantly more capital and more time than conventional software businesses before reaching large-scale revenue.
Specialist deeptech funds are expanding too
Generalist VCs are not the only investors raising money.
Aum Ventures announced a first close of ₹225 crore for its planned ₹750 crore India Innovation Fund II, which will invest in areas including space, semiconductors, defence tech, AI, robotics, energy transition and advanced manufacturing.
Java Capital also launched a third fund in February with a target corpus of ₹400 crore, including a greenshoe option, to back 15–20 IP-led deeptech companies.
Meanwhile, Info Edge disclosed in June that it had deployed ₹1,003 crore across 54 AI and deeptech startups since 2020.
These examples suggest the sector is developing a broader capital stack rather than relying on a handful of specialist investors.
India’s VC fundraising environment is also changing
The shift towards deeptech sits within a wider revival in India-focused venture fundraising.
More than $4.5 billion in India-focused VC capital was raised in the first half of 2026, according to Moneycontrol’s compilation, with AI, advanced technology and manufacturing featuring prominently in several new funds.
Some funds remain broad-based, but a growing number are explicitly adding deeptech or AI themes.
That creates an important distinction.
A fund saying it is “interested in deeptech” does not automatically mean large amounts of capital will immediately reach startups. Fundraising announcements, deal evaluation and actual deployed capital are separate stages.
The stronger evidence of a structural shift will be whether these VCs continue investing through later rounds when deeptech companies need substantially larger cheques.
Deeptech still creates difficult risks for investors
Growing interest should not be confused with easy investing.
Deeptech startups typically face longer product-development cycles, larger capital requirements and greater scientific uncertainty than conventional digital companies.
The Indian government’s own definition of a deeptech startup recognises these characteristics, including high R&D intensity, significant novel intellectual property, extended development timelines, capital-intensive infrastructure and technical uncertainty.
That creates several risks for VCs.
A technically successful product may not become commercially viable.
Manufacturing costs can remain too high.
Government procurement can take longer than expected.
Companies may require multiple rounds of financing before meaningful revenue emerges.
And specialist technical due diligence can make investment decisions slower and more expensive.
This is precisely why the move toward expert networks matters.
What does this mean for Indian deeptech founders?
For founders, the biggest benefit may be more competition among investors.
A larger number of VC firms means a startup working on semiconductors, robotics, advanced materials or aerospace no longer needs to depend entirely on a small group of specialist funds.
But founders should not assume every generalist VC is now a deeptech investor.
The important questions are whether a fund has:
technical evaluation capability,
patience for long product cycles,
reserves for follow-on rounds,
access to strategic customers,
manufacturing expertise,
and a realistic understanding of regulatory timelines.
For a deeptech founder, the quality and time horizon of the investor can matter as much as the initial cheque.
What the $574 million number really means
The $574 million funding figure makes for a strong headline, but it should not be interpreted as evidence that every part of Indian deeptech is receiving abundant capital.
Large rounds can disproportionately lift the total.
Pixxel’s $100 million and Skyroot’s $60 million together account for a substantial portion of the Venture Intelligence total cited by ET.
The number of deals also remains below the 94 transactions reported for all of 2025.
What is more significant is the change in investor behaviour: established generalist funds are looking at more deeptech companies, hiring technical experts and building frameworks to understand businesses they may previously have considered too difficult to evaluate.
That may ultimately matter more for India’s startup ecosystem than any single year’s funding total.
What to watch next
Three developments will indicate whether the current shift becomes durable.
First, whether generalist VCs continue investing after seed and Series A rounds.
Second, whether deeptech startups produce commercially successful exits or large public-market outcomes.
Third, whether government-backed capital successfully brings more private institutional money into long-duration technology projects.
If those pieces come together, Indian deeptech could move from a specialist corner of venture capital into a mainstream investment category.
For now, the clearest signal is that more investors are willing to learn how to evaluate it.
