1 week ago
Deep-tech Investments Rise in India, Patient Capital Tests Success
Deep-tech companies work on difficult technologies such as artificial intelligence, semiconductors and aerospace products.
More investors in India are putting money into these companies.
Some investors may be joining because they fear missing a popular trend.
Experts say these businesses usually need many years before their products are widely used.
They also need repeated funding while they develop and test their technology.
Sarvam AI and other startups recently raised large amounts of money.
Partnerships between Indian and foreign companies are also helping develop some products in India.
The results will depend on whether investors remain patient and whether the companies can eventually succeed and provide exits for them.
Indian deep-tech startups are attracting more private-equity and venture-capital investment across emerging technology fields.
Industry experts warn that deep tech requires substantial risk-taking, continuous funding and investors willing to wait for adoption.
V Balakrishnan said some funds may be investing because of fear of missing out and questioned how they will eventually exit.
Sarvam AI raised $234 million in the first close of a $300 million Series B round, reaching a reported $1.5 billion valuation.
Partnerships involving Reliance Industries, Rolls-Royce Holdings, Voltas and Atomberg Technologies are supporting domestic development and manufacturing in critical technology areas.
- Who
- Indian deep-tech startups, private-equity and venture-capital investors, industry experts and technology companies.
- What
- Investment in Indian deep-tech startups is increasing, alongside partnerships to develop or manufacture critical technologies in India.
- Where
- India, including Bengaluru and other locations where the companies operate.
- When
- The article cites funding rounds in June and August and partnerships announced in the preceding week.
- Why
- Investors are responding to emerging opportunities and India’s push for greater self-reliance in critical technology areas, though experts say long-term funding will be necessary.
Patient-Capital Advocates
FOMO-Driven Investment Advocates
Investment horizon
Patient-Capital Advocates
Deep-tech companies need substantial risk capital, continuous funding and a long period before their products are adopted.
FOMO-Driven Investment Advocates
Private-equity and venture-capital funds are increasing investments because deep tech is an emerging opportunity they do not want to miss.
Investor exits
Patient-Capital Advocates
Investors may face difficulty obtaining exits if startups require years of development and adoption before producing results.
FOMO-Driven Investment Advocates
Recent large funding rounds and growing interest from major investors show that capital is currently available for promising deep-tech companies.
Technology self-reliance
Patient-Capital Advocates
Partnerships alone do not guarantee success; sustained investment and successful development will be needed to improve India’s technology sovereignty.
FOMO-Driven Investment Advocates
Tie-ups between global technology firms and Indian companies are viewed as signs of improving indigenisation in defence, aerospace, semiconductors and manufacturing.
Key facts
- Sarvam AI funding
- Raised $234 million in the first close of a planned $300 million Series B round in June.
- Sarvam AI valuation
- Reached a reported valuation of $1.5 billion after the funding round.
- Discovered Materials funding
- Raised $9 million in a seed round in August.
- Ethereal Machines funding
- Raised $28.5 million in a Series B round in June.
- Key investment concern
- Experts said deep tech requires risk-taking, continuous investment and patient capital.
- Defence partnership
- Reliance Industries and Rolls-Royce Holdings announced a partnership to develop fighter-jet engines in India.
- Manufacturing partnership
- Voltas and Atomberg Technologies agreed to manufacture air-conditioner compressors in India, which are currently imported.
Quotes
V Balakrishnan
Chairman of VC fund Exfinity Venture Partners and former CFO of Infosys
“Deep-tech (investment) is the new flavour. Everyone is investing in deep-tech now. But, deep-tech is a long game. It needs a lot of risk and patient capital.”
thehansindia.com
Sources
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