Desi Deeptech Funding Soars 78% in 2024: A Turning Point for India’s Innovation Ecosystem

By Admin

21 Apr, 2025

India’s deeptech ecosystem is witnessing a watershed moment. According to a new report by Nasscom and Zinnov, the sector recorded a massive 78% surge in funding in 2024, signaling renewed investor confidence and strong policy support. The rise marks a pivotal point for startups driving innovation in AI, spacetech, semiconductor design, and advanced manufacturing.

A Year of Remarkable Growth

The momentum actually began in 2023, when the country added over 480 new deeptech ventures—double the number seen in the previous year. This growth spurt brought the total number of deeptech startups in India to nearly 4,000, laying a strong foundation for sustained progress. The boom was further boosted by government-backed initiatives and accelerated breakthroughs in generative AI, enabling emerging startups to punch above their weight.

Big Bets, Bigger Confidence

In 2024, the sector attracted $1.6 billion in funding, with the top 10 startup funding rounds alone accounting for $600 million. Interestingly, nine out of these ten were AI-driven software platforms, targeting a variety of real-world problems across industries. Not only did these startups receive larger investments, but they also commanded ticket sizes comparable to or higher than traditional tech startups, indicating deepening investor trust.

Founders Seek Ecosystem Maturity

Despite this optimism, startup founders caution against premature celebration. “The best way to ensure Rs 10,000 crore reaches the right builders is to ally with the right venture capital funds who have a good track record,” said Kaushik Mudda, cofounder of Ethereal Machines, a Bengaluru-based precision manufacturing startup. He noted that most venture capitalists still base decisions on market trends or Western benchmarks rather than understanding indigenous technologies.

Mudda calls the recent policy shift a “real policy pivot” that showcases India’s long-term vision. However, he also highlights a structural challenge: deeptech startups typically need large upfront capital, with revenue arriving only after years of R&D. “We’ve managed by being extremely frugal,” Mudda added. “Now I see a lot more startups benefiting from raising larger rounds in deeptech. I just hope the funds are used wisely before the revenue starts flowing in.”

The Road Ahead

While the numbers are encouraging, India’s deeptech future hinges on more than just capital. Founders and investors agree that ecosystem maturity is vital. This means building strong domestic demand, ensuring consistent capital flow beyond the early stages, and creating meaningful exit pathways for startups.

India is clearly at an inflection point. With the right mix of policy, capital, and ecosystem support, the deeptech sector can evolve into a self-sustaining innovation engine, powering India’s global tech ambitions well into the future.