India ranks 6th among DeepTech ecosystems

Chennai:While Commerce minister Piyush Goyal’s remarks on start-ups have stirred up a hornet’s nest, the fact remains that IT services powerhouse India is ranked 6th among the top 9 DeepTech ecosystems and 8th in DeepTech funding.

According to Nasscom’s latest data available, India ranks 6th among the top 9 DeepTech ecosystems in the world mainly due to lack of funding and relatively weak DeepTech enabling or supporting ecosystem. The ecosystems in India, US, UK, Canada, Germany, France, Japan, Switzerland, and Israel were ranked based on performance and funding across different stages.

India currently has over 3600 DeepTech startups, of which around 1000 startups have been added since 2020. Of the 3600 DeepTech startups, 74 per cent are into AI-related ventures, 23 per cent into big data and analytics, 5 per cent into IoT and 10 per cent blockchain.

Cumulative global VC investments in DeepTech startups, over the past 10 years, reached $590 billion in 2023 and Indian startups managed to grab $10 billion in the five years till 2023 and is ranked 8th in terms of funding among the global ecosystems.

In 2024, Indian DeepTech startups received $734 million, and this was just 6.33 per cent of the total funding gone into startups in 2024, as per the data of Venture Intelligence. In 2023, they received 1.2 billion, which was 13 per cent of startup funding.

While availability of AI focused talent is a driver for India, India also needs to prioritize building skills across multiple technologies to truly unlock its DeepTech potential, finds Nasscom.

Startups cite funding for scaling, talent attraction, and global expansion as the key challenge areas. Investors are wary of long gestation periods, collaboration dynamics, and effective exits. Enterprises find IP and data management as the key challenge, while academia struggles with long-term funding and constructing collaborative networks.

“In multiple scenarios, it becomes very difficult to invest into DeepTech companies because the market the founders are solving for is very small. Technology readiness does not exist and access to global networks to conduct technology diligence is absent,” finds Blume Ventures.

Nasscom wants the government to identify and strengthen innovation clusters, facilitate availability of patient capital and fast track the implementation of the National DeepTech Startup Policy (NDTSP).

“India has to establish sectoral innovation hubs that bring together the R&D infrastructure and domain sector, academia, government together with DeepTech startups. To begin with, focus could be on five sectors, including Medical Devices, Space, Defence, Agriculture, and Manufacturing. Each cluster should have defined priorities that address India-specific solutions and build IP for global opportunities,” it said.