As generalist VCs step in, specialist funds help deeptech startups finish the job

Funds like Peak XV Partners, Accel and Elevation Capital are now focusing on Deeptech. Peak XV has made some investments in the sector this year, which is currently hidden. Accel has signed four agreements from aviation to developed production and A and B series investments. These companies collected $ 63 million collectively from Accel and other investors. The global firm’s investments in Deeptech this year include a $ 3 million seed investment in Micro Gas Turbine company Nabhdrishti Aerospace. Accel signed a 10 million dollar tours with Sarla Aviation and composite manufacturer Fabheads, a electric vertical departure and landing manufacturer. Meanwhile, the company directed a $ 40 million B series tour for Chemicals Maker Scimplify.

Accel We see all these sectors: Industrial artificial intelligence, robotics, material science and precision production, coming together to create advanced production, ”Accel said.

Height Capital made an investment this year, the Aerospace component manufacturer Jeh Aerospace’s A series of $ 10 million. However, the Fund said that the investment team, which has now spent time in Deeptech, has higher members of the investment team. Ashray Iyengar, Director of the Capital of Height, said, “The transition to an area where we believe it has a lot of potential in the allocation of bandwidth,” he said. Between 2020 and 2024, the company invested in the general autonomy of the robot initiative, the satellite -based ocean monitoring company Piersight, renewable energy company SolarSQUARE and AI+IoT Water Management Starting News Water.

Focusing on Deeptech in the country comes at a time when the US and China are in a struggle for technology domination. In the meantime, India is trying to position itself as a developing player. The government was vocal with its support, as proved in the announcement in April. La10,000 Crore Fund Fund to Capital to Deeptech Ventures. As a result, India’s Deeptech ecosystem is at a critical point. With the input of the generality funds, experts can not only make seed investments but also support initiatives with the growth phase capital.

Traditionally, companies working in advanced areas such as Deeptech initiatives, quantum information process, aviation, robot and material science have longer ripening cycles as they focus on creating intellectual property. These companies usually require significant investments for time, money and research. With the general funds with larger wallets, they can offer greater controls to help the journey on the way.

Look out

“The initiative capital has not focused on this sector for a while, because the survival of each software company is now threatened by artificial intelligence,” he said.

The company closed its third fund with a body of 70 million dollars to invest in infrastructure, space technology, climate technology, advanced production and double -use defense technology.

Special Invest said he was determined to make pre -seed and seed investments. The Deeptech Fund allocates 50% of its new fund to invest in 18-20 initiatives between 2025 and 2029, while the rest will be saved for tracking investments in different background tours.

Two Deeptech -oriented funds already bet on early growth and late stage companies. Mint In July, Yali Capital’s first fund of 104 million dollars will allocate 30% of his first fund to invest in the D series and beyond.

Meanwhile, Growx Ventures, who came in the seed stage and used to support FinTech and Saas companies before, said that 75% of the 50 million dollar fund will invest in B Series investments in Deeptech companies. From the existing Fond, Growx Ventures collected $ 1.5 million donations for Counter-Drone Startup Armory.

According to the data platform Venture Intelligence, other deep-technology-oriented funds IIIMA-CE’s Bharat Innovation Fund, which collects $ 150 million, is included in the pre-A and A series investments and Mela Ventures targeting $ 117 million for the new fund.

Hypersexia satellite image initial Pixxel was selected by the US National Aeronautics and Space Administration (NASA) as part of the commercial Smallsat data collection program in September last year. The total value of the contract is $ 478 million divided between eight selected companies. According to Tracxn, the company’s first supporters are Growx Ventures and Techstars, which provides the company’s $ 700,000 seed financing in 2019.

Growx Ventures partially released from Pixxel earlier this year and the company’s 17 -fold return.

Typically, Deeptech funds invest between $ 250,000 and 1.5 million dollars when they enter initiatives before and in seed stages. Earlier this year, Speciale Invest made a preliminary investment of $ 1 million from aviation and space, which entered autonomous re -entry vehicles.

Generalist VCs have a wider seed investment due to the size of their funds. Investments can start up to $ 250,000 and work upwards from there. With the growth phase investments, it has more capital that general funds can offer.

Enter the generals

Among the generalist VCs, most of Peak XV’s deep technology investments came out of the fluctuation platform. The company has invested in semiconductors, biomators, green energy, area, AI basic models and quantum information processing companies. The company refused to nam the initiatives it has invested this year or what areas they target in Deeptech. Rajan Anandan, the executive partner of PEAK XV Partners, said, ım I talked with at least 25 Deeptech initiatives in the last three weeks ..

Accel is investing in production and Deeptech companies from the new $ 650 million fund launched earlier this year.

In Growx Ventures, it comes after the deployment of focus on Deep Tech, 17 investment in FinTech, B2B Saas, and the first fund that made spaces such as Spacetech and Robotics.

Ashish Gija, the founding partner of Growx Ventures, said, “The scene is held for Deeptech, and many opportunities will emerge in it. We see the area as an area that emerges.” Apart from Pixxel, the company also invested in Bellatrix Aerospace, which built green drive engines in the field.

Although each company has its own wide thesis on how the deeptech ecosystem has developed, there are partnerships. Aviation and defense, quantum information processing, material sciences and production led by IP are common between Accel, Peak XV and height capital.

A sector -specific fund like Yali Capital allocates 50% of the fund for chip design and aviation, while the rest will go to surveillance, robotic, genomic, AI and smart production.

Why now?

Government policy is a major push factor. In July, the center approved a research, development and innovation (RDI) program of $ 12 billion. The Department of Science and Technology will work under the Anusandhan National Research Foundation (ANRF).

The program focuses on four fields: the scaling of RDI initiatives in the private sector, the purchase of technologies that are thought to be important for the strategic values of financing projects for the sake of higher technology preparation levels (TRL), and most importantly, the establishment of a deep technology fund.

The national quantum mission received a share in QNU laboratories and QPAI in financing tours to collect $ 7.1 million and $ 32 million, respectively in the QNU Labs and QPAI, just like the India AI Mission.

Changing Game Book

With the general funds following Deeptech, the ways of approaching these investments will have to change. Experts, the journey of initiatives in the sector is longer and that it is not as in sectors such as fintech, consumer technology, AI and even Saas.

Rajaram will have to look at the generalist funds differently from other theses of generalist funds. Deeptech will fail as a strategy for them, if they do not think of investments as long -term bets, ”he said.

Initiatives in other sectors can provide income and ultimately achieve profitability in 10 years or less, while Deeptech companies usually take at least seven years for them to develop a minimum product.

Deeptech -oriented funding managers, when they begin to make money, their growth is shaped like a hockey bar: it was pressed for several years before it was sharply upwards.

However, expert funds warn against generalist VCs It takes a step back before the long path to the segment, to evaluate companies and then to commercialization.

Currently, most industry -oriented funds are playing in the entire stage category such as Specale, Growx, Java Capital, Yournest Venture Capital, Exfinity Ventures: from seed to series.

However, the ecosystem needs funds that can go beyond and provide B and beyond. Gi We need the big host players focusing on Deep Tech, a game book to support the founders.

Cumulatively, between 2021 and 2023, global venture capital investments in Deeptech initiatives, a Nasscom Report. Compared to this, India’s financing in the same time period was $ 7.1 billion.

Slow burning

“Considering talent discovery, increasing company types and opportunities, we should first consider whether we have the right capital to create these companies,” he said. When the companies in the sector begin to perform, capital usability is automatically scaled.

Government programs such as IDEX (innovation for defense perfection) have been important for both the founders and VCs. While the founders give the chance to make money from a government agreement and show the applicability of their products to VCs, the program for fund managers shows that the regulatory risk to invest in the segment is not as high as before.

“There is a momentum, but has not yet been seen whether it turned into something more concrete,” said Kshitij Khandelwal, the chief technology manager of Space Startup.

For now, as in 2010 of Deeptech Saas: Early but has great potential. Peak XV Anandan, “Prime Time 5-10 years after, but still we are moving further than we returned at that time. I think we will see 1 to 100 acceleration for the next ten years,” he said.