India is said to have close to 4,000 deep tech startups, of which around 500 are said to have been founded in 2023. While this indicates a surge in deep tech startups, a report suggests that only $850 million will be raised in 2023, a drop of nearly 80% compared to the $3.7 billion raised in 2022.
What’s happening? India seems to have realised its potential. The future of deep tech. Is it the arrival of generative AI? Or leveraging India’s large pool of engineers? In addition to these aspects, in 2023 the Indian and US governments signed an agreement to collaborate and strengthen the deep tech ecosystem. Interest is growing. But where do we go from here?
How can we strengthen deep tech startups? Even if we have the best talent, what happens when we actually start a business? How do we take an idea that is great on paper and bring it to market? Similar to how India and the US have partnered, do we need more partnerships and collaborations to accelerate the deep tech ecosystem in India?
Perhaps DeepTech startups can look to organisations looking to take it to the next level.
Kiran Shesh, CEO, TIH Foundation for IoT and IoE (TIH-IoT), IIT Bombay, said, “We are in the business of supporting technology development at value stages as deep as TRL (technology maturity level) 4 to TRL 7. Our job is to identify the right technologies that will have a significant impact in India, that can be commercialised and can produce deployable products.”
“Once we invest in startups, we help them grow by giving them business, helping them find customers and potential venture capitalists so they can progress from seed support to Series A funding along with fellowships and training programs. We also work in such a way that students, startups, academia and industry can come together to create magic in the technology space of IoT… We are an impact-driven operation as we don’t want to develop technologies that end up as publications in libraries,” says Shesh.
So, someone in the early stages of TRL might focus on building a strong prototype and validating their technology, while someone in the later stages of TRL might focus on refining their product, addressing technical challenges, and figuring out how to commercialize.
“Companies have the option to set up large in-house research and development teams that work on developing new products or improving on existing products. Companies always have to make or buy decisions – develop something in-house or partner with academic institutions that are doing cutting edge technological research. So, we are an extension of technology development,” said Shesh.
“Being a national hub, we are able to collaborate with departments from IITs and NIITs, and we are putting together project teams with a consortium of faculty from different universities. Earlier, this might not have been possible as everyone was working in isolation,” Shesh said.
For deep tech entrepreneurs, purely theoretical research may be appealing; the focus can be on solving a real-world problem and customizing an innovation to address it. Beyond a basic idea or prototype, the technology needs to be developed to the point where it empirically works and has a clear path to commercialization. Incubators and technology development hubs can provide a wealth of resources, including funding, business development, and network access, to help refine business models and scaling strategies.
And there’s no better time to start this than now.
Sheshu said, “When it comes to the startup ecosystem in India, there has never been a better time for a 20-30 year old to start a company and fail because there is a buffer ecosystem that stops someone from getting hurt. There is support in terms of funding and talent. Someone invents a technology but if it doesn’t create jobs, it may not solve anything. And even if a startup fails, the founders get better, they learn and become good mentors to teach incubators and startups what not to do. 20-30 years ago, entrepreneurship was not encouraged because of the social structure, but now it is much more open. And there is no dearth of funding for good ideas.”
While entrepreneurship has become a middle-class dinner table topic thanks to India’s Shark Tank, the obsession with unicorns is leading people to go places they don’t want to go, so romanticism should be curbed, especially when it comes to something as fast-growing as deep tech.
As a Chevining alumnus who studied briefly in London, I have seen how UPI has become a hot topic. I have also seen how London is investing in innovation programs where academia and businesses collaborate, especially in the fintech space in a sandbox environment. Can India get such in-depth R&D support? Or does it already have it? Collaboration certainly eases the burden.
“IoT and IoE are going to be big things in the future. Everything will be connected, people will be able to control their homes, their cars, their phones. There will be trillions of IoT devices controlling people’s lives and the world,” Shesh said.
Shrija Agrawal is a business journalist. The views expressed here are personal.
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