India’s deeptech startups are beginning to reach a stage that was largely out of bounds for traditional growth investors: they have established revenue streams, some evidence of unit economics and are starting to grow in a more stable way.
The shift is also showing up in larger cheques and a broader mix of investors entering the sector, according to industry experts, even as growth funds confront the difficulty of evaluating businesses with long development cycles and technical risks.
“Today there are more of these businesses that have established revenue streams, showing some unit economics, and are now starting to grow in a more stable way,” said Dushyant Singh, managing director at Playbook Partners, a sector-agnostic growth fund.
Playbook joined Skyroot Aerospace’s $60 million round, which made the company India’s first spacetech unicorn at a $1.1 billion valuation in May.
At least six of the top 10 deeptech deals so far this year were rounds of $30 million or more from private-equity and venture-capital investors, according to Venture Intelligence data.
Gaja wrote a roughly ₹95 crore (around $10 million) cheque in the $74 million second tranche of Sarvam’s $300 million Series B and is actively scouting for deeptech and artificial intelligence (AI) bets. Avataar Ventures led Ethereal Machines’ $29 million round, while Exponent Energy’s $21 million round was led by 360 ONE. The asset manager has raised a ₹1,500 crore fund to back defence, aerospace and frontier-tech companies.
Electric-vehicle manufacturer River Mobility raised $120 million in equity and debt from Elev8 Venture Partners, Claypond Capital and existing investors. It was the first time the company raised domestic capital.
But a large round does not necessarily mean a deeptech company has reached the growth stage.
Last week, Airbound, an unmanned logistics and delivery drone startup, raised $37 million in a Series A led by Greenoaks, with participation from DoorDash, Physical Intelligence founder Lachy Groom, Lightspeed and Humba Ventures. Lightspeed’s India-specific fund was the only local participant.
Founder and chief executive Naman Pushp said Airbound began looking to outside investors only after exhausting all domestic options.
“We were just shuttered between the growth and early stage team,” he said of conversations with an Indian fund, which he declined to name. “Initially it was the growth team evaluating us because the round size is for the growth team. They realised that they cannot evaluate us via growth metrics, and moved us to their early-stage team. But for that team, which normally writes cheques for $10 million and below, writing a $30 million cheque hurts.”
Growth investors typically enter after a company has demonstrated product-market fit, a threshold that deeptech companies can struggle to meet because of their longer science-to-commercialization timelines.
“Given the significant investments being made in this domain in the US, the buzz and fear of missing out on this wave are much stronger,” said Rishabh Jain, director, digital, technology & consumer investment banking at Avendus Capital. “Funds that previously did not invest in deep tech are now spending more time evaluating the sector.”
Geopolitical tensions and supply-chain risks are adding to the appeal of homegrown technologies. Operation Sindoor, the conflict in West Asia and potential supply-chain shocks from abrupt Chinese restrictions on special technologies have led countries including India to place greater importance on developing domestic capabilities. This is strengthening the strategic case for sectors such as aerospace, defence, spacetech and semiconductors, particularly as the government deploys capital through mechanisms such as the ₹1 trillion Research, Development and Innovation (RDI) Fund.
But geopolitics is only part of the story.
