KEY HIGHLIGHTS

• Deeptech sector in India raised $11.4 billion from 2015 to mid-2026.
• 2025 saw $2.96 billion in funding despite a broader startup ecosystem slowdown.
• AI, EV, semiconductors, and spacetech are the fastest-growing segments.
• Policy initiatives like the Rs 1 lakh crore RDI Fund are scaling up support.
• The Series B/C funding gap remains a significant challenge.

Introduction

The deeptech sector in India has witnessed unprecedented growth, with $11.4 billion in cumulative funding between 2015 and mid-2026, as per the Bharat DeepTech Report 2026 by the Indian Venture and Alternate Capital Association (IVCA).

Deeptech Sector Overview

Deeptech, or deep technology, refers to advanced technological innovations that require deep scientific and engineering expertise. The sector has seen a remarkable surge in funding, driven by India's growing scientific and technological capabilities.

Key Funding Trends

The year 2025 stood out as a landmark year with $2.96 billion raised across 189 deals. This figure is particularly significant because it was achieved while the wider Indian startup ecosystem faced a major funding slowdown.

Emerging Technologies

The landscape is diverse, but capital is concentrating in high-impact areas. Artificial intelligence (AI) and generative AI lead in total funding at $2.8 billion, followed by electric vehicles (EV) and battery technologies. However, semiconductors and spacetech are the fastest-growing segments, driven by strategic national priorities and new policy frameworks.

Challenges and Solutions

Despite the momentum, structural hurdles remain. The report highlights a “valley of death” where only 15% of surveyed funds are willing to back projects at the earliest Technology Readiness Levels (TRL) 1-3, which represent basic research and proof-of-concept stages.

Furthermore, a sharp drop in participation occurs between seed funding and Series B rounds, creating a growth-stage capital shortage known as the Series B/C gap.

Policy Support

Policy support is already scaling up through initiatives like the Rs 1 lakh crore Research, Development and Innovation (RDI) Fund and the India Semiconductor Mission. Investors are calling for further reforms, including dedicated tax incentives and public procurement mandates to ensure a predictable demand pipeline.

Future Outlook

As the exit landscape matures, exemplified by the $600 million in exits recorded in 2025, India is moving closer to realizing its ambition of taking indigenous innovation from the lab to leadership.

Conclusion

The deeptech sector in India is on an upward trajectory, with significant funding and policy support driving advancements in critical technologies. Addressing the Series B/C funding gap, deepening domestic LP participation, improving exit pathways, and strengthening the policy and market ecosystem will be critical to building globally competitive deeptech companies from India.

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