Regardless of funding crunch, India’s deeptech start-ups has grown 2x since 2022

India is now house to greater than 3,600 deeptech start-ups, with over 480 being established in CY2023, 2X increased than the quantity established in 2022, in response to a brand new report by Nasscom.

Of those 480 start-ups launched in 2023, over 100 are creative deeptech corporations which have developed mental property or modern options in new domains. Notably, 74 per cent of the deeptech start-ups established this 12 months have targeting AI, a big enhance from 62 per cent within the interval from 2014 to 2022.

This comes whilst the worldwide downturn in start-up funding has additionally seen an affect on the Indian deeptech start-up ecosystem. In CY2023, Indian deeptech start-ups secured $850 million in investments (a decline of 77 per cent over CY2022), with AI start-ups garnering a majority share of this.

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Funding Stoop

Each early and late-stage offers have witnessed a discount of over 60 per cent this 12 months. This downturn is primarily attributed to smaller common funding sizes at each the seed and late phases and buyers remaining cautious largely because of the prolonged gestation durations typical of those ventures. 31 M&A offers had been reported in CY2023, a decline of about 45 per cent as focus shifted to speed up tech capabilities that present the AI edge.

The DeepTech start-up ecosystem can be witnessing an elevated thrust on constructing options which might be sector-focused. The report highlights 4 sectors which might be of strategic significance, together with area and defence, healthcare, automotive, and industrial manufacturing. 500+ start-ups throughout these 4 sectors are constructing options for electrification, industrial robotics, surveillance and drones, satellite tv for pc imagery, propulsion methods, most cancers diagnostics, and many others.

Though nearly all of DeepTech start-ups have historically been concentrated in established hubs, owing to a mature ecosystem and expertise entry, there’s development in rising hubs being witnessed. 110+ DeepTech start-ups had been incepted in rising hubs in 2023 — a twofold enhance from 2022 and the best development within the final 5 years, pushed by an increasing expertise pool, value benefit, supportive ecosystems, and proactive insurance policies enhancing innovation in these areas.

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Key challenges

The report additionally highlights the important thing challenges for the deeptech ecosystem and the necessity for an built-in strategy to speed up its development. Whereas India is ranked 3^rd within the know-how start-up ecosystem, it’s within the 6^th place for deeptech start-ups.

Sharing her views on the Indian deeptech start-up ecosystem, Kritika Murugesan, Head, Nasscom Deeptech, mentioned, “For India to be within the high 3 DeepTech start-up ecosystems, key areas that want help are: entry to affected person capital for DeepTech start-ups to construct and scale their merchandise; robust R&D partnerships with academia for nextgen innovation; streamlining authorities procurement for startups to construct India-specific options; and implementation of the DeepTech Coverage that was tabled in 2023.”