Deep Tech, Semiconductors, and Electronics Emerge As Pivotal Sectors in Startups: IvyCap Founder India's semiconductor and electronics startup ecosystem is also witnessing rapid growth due to favorable government policies like the Production Linked Incentive (PLI) scheme and a growing demand for electronics and chip design.
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Deep tech, semiconductors, and electronics emerge as pivotal sectors in the Indian startup ecosystem said Vikram Gupta, Founder and Managing Partner of IvyCap Ventures on IvyCap Day, the venture capital firm's flagship annual event.
Speaking on the Indian startup ecosystem maturing over the years, Gupta said it stands as a testament to the country's growing innovation, adaptability, and resilience and that over the past decade, startups have emerged as transformative players across various sectors, from deep tech to consumer-driven platforms, setting the stage for an entrepreneurial revolution.
"Amidst economic uncertainties and rapid technological advances, startups are not just surviving but thriving, capitalizing on disruptive technologies and innovative solutions. Venture capital has increasingly become a lifeline, providing not only capital but also strategic support to foster long-term growth, inclusive leadership, and sustainable business practices," said Gupta.
India currently has more than 3,600 deep tech startups, out of which 480 were established in 2023, nearly two times more than the number of deep tech startups established in 2022, according to a Nasscom-Zinnov report.
The government, recognizing this trend has introduced the National Deep Tech Startup Policy (NDTSP), which aims to address the challenges confronted by deep tech startups through definitive policy interventions to create a conducive ecosystem.
Thought leaders such as Ajai Chowdhry, Co-founder of HCL, and Pradeep Gupta, Chairman of CyberMedia Group, emphasized the role of innovation in positioning India as a global leader in technology. On the consumer side of things, founders such as Vishal Jindal of Biryani By Kilo and Abhishek Negi of Eggoz shared their experiences of navigating the thin line between rapid expansion and profitability.
India's semiconductor and electronics startup ecosystem is also witnessing rapid growth due to favorable government policies like the Production Linked Incentive (PLI) scheme and a growing demand for electronics and chip design.
According to a blog post by Neeraj Bansal, Partner, Head India Global at KPMG, the country's semiconductor market is projected to grow from US$33 billion in 2023 to US$64 billion by 2026, mostly driven by manufacturing, research, and development.
"India's focus on developing a skilled workforce and fostering innovation is also strengthening the country's position in the global supply chain, with ambitious goals to reach a US$110 billion market by 2030," said Bansal in the blog post.
Dinesh Khara, former Chairman of SBI, during his keynote address at the event, spoke on the power of leadership in driving innovation and growth, underscoring SBI's support for startups, illustrating how traditional institutions are partnering with new-age businesses to create synergies that fuel India's entrepreneurial ecosystem.
"I believe the ecosystem has already strengthened significantly. The RBI has introduced initiatives to encourage startups, such as sandbox technology. Other regulators, particularly in the insurance sector, have taken cues from this and are fostering a supportive environment. This will go a long way in providing an enabling framework for startups to thrive," said Khara.
In addition, V. Anantha Nageswaran, Chief Economic Advisor to the Government of India, delivered a virtual address, offering insights into India's evolving policy landscape.
"I know that the Central Bank of India projects a growth rate of 7.2 per cent, and recently, the World Bank updated India's forecast to 7 per cent. Some may recall that in May, Standard & Poor's upgraded India's credit rating outlook to positive from stable, suggesting that a sustained 7 per cent fiscal deficit at the general government level could lead to an upgrade. Currently, the combined fiscal deficit of the union and state governments is below 8 per cent, and the union government is on track to achieve a 4.5 per cent target next year," said Nageswaran.
Neelkanth Mishra, Chief Economist, Axis Bank, Head of Global Research, and Whole Time Director of Axis Capital said that the current landscape presents an interesting opportunity and many challenges remain for policymakers and it is presumptuous to assume growth is guaranteed.
"Looking at China's evolution, they have implemented major reforms every 4-5 years. Over the next 5-7 years, I foresee more workers, better productivity, and improved total factor productivity as we adopt global best practices. With advances in digital public infrastructure, AI will help address challenges in education and healthcare. Sustaining 6.5-7.5 per cent growth over the next five years is very achievable."
As for India's venture capital landscape, there is an increasing need for collaboration and consolidation, and industry leaders like Ashish Fafadia, Partner, Blume Ventures and Gopal Jain, Co-founder and Managing Partner, Gaja Capital pointed to the growing importance of domestic Limited Partners (LPs) in shaping investment strategies and underscored that sustained cooperation between founders, investors, and policymakers is essential for unlocking the ecosystem's full potential.
