Get All Access for $5/mo

Funding Remains the Biggest Challenge for Indian Deeptech: Nasscom and Zinnov The report shared deep insights into the emerging scenes within the Indian tech-eco system, especially in deep-tech, challenges, future and other crucial insights into the funding behavior around the sector.

By Prince Kariappa

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Nasscom, an Indian non-governmental trade association and advocacy group in collaboration with Zinnov, a global management consulting firm based in Gurugram recently published a report called 'India's DeepTech Dawn Forging Ahead'. The report shared deep insights into the emerging scenes within the Indian tech-eco system, especially in deep-tech, challenges, future, and other crucial insights into the funding behavior around the sector.

The report by Nasscom stated that by embracing DeepTech, India can address the challenges unique to the area, leapfrog traditional development models, and lead the world as a technological leader.

According to the report, the population in India is projected to reach 1.6 billion by 2050. Scarcity of resources is a major threat with food and water security being major concerns while sanitation and health systems loom around the corner.

The report gives examples of startups and solutions exhibiting the Indian DeepTech ecosystem, with the potential to solve the larger issues. Clarico is one such that provides AI and IoT-enabled HVAC systems for energy management and air purification. HealthPlix provides a virtual clinic solution with EMR integration to enable healthcare in remote areas.

CY 2023 saw the number of new DeepTech startups in India more than double that in 2022, which saw the numbers jump from 215 to 481 primarily due to a sudden growth in the number of AI-backed DeepTech startups.

AI leading the way

Distribution by category is led by AI, followed by Big Data and Analytics, IoT, Blockchain, and AR/VR. As much as 74% of the startups were AI-related, establishing itself as the dominant technology leading the sector. While the number of new DeepTech startups saw a 2X increase in 2023, the number of new inventive DeepTech startups grew three-fold during the same period.

A strong 64% of all the inventive DeepTech startups are said to be utilizing AI as their primary technology, catering to key sectors such as Enterprise Tech, Health Tech, and Agri-Tech.

Bengaluru led the charge for being the city to lead the race with as many as 13 Technology Business Incubators academic in nature, 39 non-academic incubators/accelerators, and 950+ startups. While there are over 2600 deep-tech startups across established centers such as Delhi NCR, Mumbai, Chennai, and Pune, emerging hubs such as Ahmedabad, Jaipur, Cochin, and Kolkata saw more than 110 deep-tech firms, with a two-fold increase.

Global slowdown affects Indian funding

The global slowdown however reflected in the Indian DeepTech startup funding which declined by approximately 77% in 2023. As much as USD 3.7 Billion raised in 2022, was preceded by a meagre USD 0.85 Billion, across 362 and 270 rounds respectively.

The Nascomm report states that the absence of many large global investors who had driven funding in previous years also contributed to the decline in funding. Median ticket size across seed-stage and late-stage reached their 4-year low and 5-year low respectively.

Although early-stage median ticket size reached a five-year high, it was not enough to offset the overall decline in funding. It is also interesting to see more than 70% of seed-stage DeepTech startups also prefer funding from VC, PE, and corporate investors.

However, with changing priorities, increasing selectiveness, and elongated timelines, funding deals have failed to close across sectors. The absence of mega deals in 2023 as compared to 9 mega deals in 2022, underscores a declining investor emphasis on large-ticket investments.

"Access to funding continues to be the biggest challenge area for 70% of the Indian DeepTech startups, with median ticket sizes being the smallest across almost all funding stages when compared to other leading DeepTech startup ecosystems in the world," said Achyuta Ghosh Head of Nasscom Insights and Pari Natarajan CEO, Zinnov.

"India's DeepTech story, more than about economic impact, is about a socio-technological shift. It paints the picture of a nation transitioning from being a technology consumer to a creator driving cutting-edge research, thus reshaping India's global narrative," concluded Achyuta and Pari in the report's foreword.

Prince Kariappa

Features Content Writer


India Needs Homegrown Product Companies In Semiconductor: Cadence Design's India MD

Most multinationals retain product ownership, key value and intellectual property at their headquarters. As a result, India, despite having a vast pool of design talent, lacks significant Indian product companies in the semiconductor industry, says Jaswinder Ahuja, MD, India Cadence Design Systems.

News and Trends

99labels Co-Founder Ishita Swarup Passes Away

Just two years into the business, it raised INR 16 crore from Info Edge and Bikhchandani, but it didn't go well

Growing a Business

The Top 5 AI Tools That Can Revolutionize Your Workflow and Boost Productivity

Discover the top 5 AI tools for marketing and content creation that every marketer needs to know.


Why I Get a Coffee with Someone New at 8 a.m. Every Single Day

Through daily coffee meetings, I discovered a unique opportunity to build new, meaningful friendships and expand my network.