Why the Deep Tech Boom Interests Indian Startupreneurs? Is the deep tech culture in Hyderabad poised for growth? Find out inside!

The poster boy of India's startup ecosystem, Vijay Shekhar Sharma has once said that technology is the only way forward and needless, that's the reality of the hour. While traditional businesses do exist, scalability is not possible without innovation today. Emerging techs like Artificial Intelligence, Internet of Things, Blockchain, Machine Learning, Virtual Reality and more, are leading the startup space.

There has never been a more exciting time for India's deep tech startup ecosystem which is at a tipping point. A research report recently indicated that India is the third largest AI startup ecosystem with Bengaluru a leading hub for deep tech startups, followed by Hyderabad. Despite the rising dialogue around deep tech, the majority are still unaware of how these start-ups differ from the technology companies.

What is Deep Tech?

Technology is an enabler for primary businesses like e-commerce but looking at deep tech, the foundation of the company is technology. Raj Neravati, the Founder & CEO of Hug Innovations Corp relates deep technology with deep learning – an aspect which is all about artificial intelligence, machine learning and another emerging/state of the art technologies.

However, according to Imaginate Founder & CEO, Hemanth Satyanarayana, Deep tech has an evolving definition and currently refers to the different areas of technology re-used in a way that is not trivial for any other companies to develop and create an innovative solution.

"Today, people generally refer to AI or machine learning as a deep tech. Expanding the definition a little more, we have started integrating computer vision, image processing, AR/VR with the term," he said. Deep tech is fundamentally a connection of different types of technologies to come up with a solution that has significant improvement over other products available in the market in terms of experience, performance and impact.

Are Investors Interested?

Funding is still one of the key differentiators for start-ups in India vs in Silicon Valley. The home-grown investors are hesitant in pumping capital into companies with no revenues whereas the western funders never back down from investing in new ventures on the merit of their technology. "It is hard to imagine those kinds of valuations here," stated Neravati.

Funding is the driver for any deep tech start-ups because the more funding you have, the more amazing stories you can create out of it. According to Neravati, in India, the primary drivers for investors are, "what kind of revenues you have, what kind of customers you cater to, how your pipeline looks like, what are your recurring revenues."

Indian investors while are more willing to take risks now, there is a deep need for some success stories to change the scenario because it is hard to fight perceptions and prove theories. "Once we have a few success stories, two things will happen – 1) You'll have a lot of cash from the exits & 2) You'll have stories to tell regarding the start-ups doing wonders," he further added.

Government's Handholding

While the central government schemes are hardly coming in handy for the majority of Indian start-ups due to the cumbersome procedures to avail exemptions but Telangana government has been taking real-time efforts to promote start-ups. By setting up T-Hub, the state government has guaranteed a fair play for start-ups because ventures registered under the initiative are able to directly pitch in for government projects.

According to the Telangana State Innovation Cell (TSIC), there are over 4000 startups operating in Hyderabad today and all are innovating in new age technologies and have in one way or the other been inspired from things happening at T-Hub.

"The Centre for Innovation & Entrepreneurship (CIE) is also actively engaged in the city startup ecosystem. In its V2.0, it almost solely focuses on deep-tech startups, seeding them directly out of research, and actively connecting research with startups. They house 80+ companies running two structured accelerators, one on deep tech, and one on medtech," stated Vijay Amritraj, Partner & CEO of Voilà F9 Gourmet.

Developing an Ecosystem in Hyderabad

While Hyderabad always had a strong entrepreneurial DNA, the IT legacy being a testament to that, it missed out on certain new age technologies. Amritraj believes that Hyderabad is one unicorn away from being totally transformed as a start-up hub and this one big success will bring along with it global funds, investors and dealmakers which in turn will help in the creation of a vibrant ecosystem.

"While the city naturally gravitates towards enterprise tech, software and healthcare because of legacy, it is the product push in the startup space, which could be transformational for the city. With companies making wearables, electric bikes, IoT gadgets and medical devices right here in Hyderabad, it augurs well for its future," he stated.

In terms of infrastructure also, Hyderabad is evolving. It is relatively a lot more inexpensive when compared to Bangalore from the commute and living point of view. For any startup, these are the most attractive parameters and a lot of people are moving from Bangalore to Hyderabad purely because of this. It is like Silicon Valley moving to the Mid-west.