Why India’s Global Startup Playbook is not suitable for Deeptech

Copyright © HT Digital Streams Limit all rights reserved. The industry Shadma Shaikh 9 min Read 27 April 2025, 07:11 PM ist Deep Science Innovation, such as medicine discovery or medical imaging, deals with orthogonal disciplines that come together. Summary His remarks may have caused a setback, but Trade Minister Piyush Goyal may have hit the nail on the head when he said India is far behind China when it comes to innovation. Mint looks at the state of Deeptech in India and why it does not have the success of the new businesses in the Internet. Bengaluru: Trade Minister Piyush Goyal recently underlined the fact that India is “far behind” China is in innovation. ‘What are India’s new businesses of today? We are focused on food delivery programs, which turn unemployed youth into cheap labor, so that the rich can get their meals without moving out of their home, ‘the pastor mourned. The setback against Goyal’s remarks was fast and predictable. The founders, unable to join camps to defend or criticize the progress of India’s enterprise ambition and effort. But outside the discourse on the internet, Goyal’s remarks pointed to an uncomfortable truth: Builders in India have long struggled to turn the fundamental science into scalable and commercialized innovation. Some literally aimed at the moon and folded under the weight of capital restrictions. India’s global startup playbook, built for Saas and Scale, is not suitable for Deeptech, defined by startups working on the border of science and engineering. Fundamental innovation takes longer, costs more and requires a very different kind of ecosystem. Unlike consumer -internet businesses that quickly scale with venture capital financing, Deeptech businesses stares long pregnancy cycles, intensive and expensive research and development (R&D) and often a scarcity of patient capital. Their milestones and breakthroughs rarely make headlines, even if they represent some of the country’s most sophisticated technical efforts. Many founders navigate different issues, from limited access to laboratories to a fragmented pool of scientific talent, while balancing global competition and uncertain revenue models. Funding is a challenge, just like their ability to build cross -disciplinary teams and navigate regulatory barriers. Worldwide, the race is accelerating Deeptech, with countries such as the US and China investing a lot in border technologies from quantum computer and semiconductors to artificial intelligence (AI) and Biotech. In these countries, state-supported funding and university pilings have created robust ecosystems where Deeptech startups can thrive despite long time horizons. In comparison, the Deeptech pipeline of India remains relatively in scale and institutional depth. The abuse of a buzzword “in India is the word ‘innovation’ so thinly stretched that it has lost all meaning,” says Santanu Datta, a veteran scientist and co-founder of Bugworks Research, a biotechnical startup, which develops first-class antibiotics. “From making a new type of merger food to the design of an electric car, everything is branded as innovation,” he adds. Look at the full image of a file photo of Santanu Datta, co -founder of Bugworks Research. But the kind of innovation in which datta is interested is slow, expensive and often invisible, where success sometimes comes years after persistent scientific work on disciplines. This form of innovation, he explains, is “a team sport, not a tennis match”. Datta makes a sharp distinction between what he calls a single parameter to multi-parameter innovation. India has managed to thrive, for example, the former – Fintech is thriving because it requires agility in just a few domains and produces returns quickly. “But deep scientific innovation, such as medicine discovery or medical imaging, deals with orthogonal disciplines that come together. You need a mathematician, an engineer, a cell biologist as well as people with business and marketing skills, all under one roof. It is rare in India because we did not build institutions or cultures that encourage such collaboration,” he says. Bugworks’ own journey extends two worlds. While the innovation is driven from India, its cooperation and financing networks extend to the US, Japan, Australia and Europe. Traditional venture capitalists (VCs), such as Datta notice, want fast exits, which are a poor fit for medicine discovery, where development can last 10 to 15 years. Instead, bugworks lean on a mixture of philanthropic capital, global health awards and specialized VCs with Patience Capital and long -term vision. Bugworks is currently doing global clinical trials for its new antibiotic agent. “There’s no short road,” says Datta. “It’s deep science. You fail years before you succeed. ‘ The building for the long-term Deeptech startups remains on the periphery of India’s venture capital landscape, and attracts significantly smaller checks year after year than their Saas and the consumer counterparts. Even at its peak in 2022, Deeptech funding in India was just about $ 2.6 billion, a shelter compared to the $ 10 billion plus that flowed into consumer technology the same year, according to the data shared by Tracxn. In the absence of traditional venture capital, the long-term Deeptech builders have put together funding models that match their timelines. For Ather Energy, the electrical two-wheeled manufacturer was born on the IIT Madras campus, a strategic investment of Hero Motocorp and support from the entrepreneur-driven investor Sachin Bansal, early momentum. Planise technologies, building underwater robotics, scaled down with the help of IDEX grants, family offices such as Ashish Kacholi’s and industry players such as BPCL and Shell. Bugworks has mixed philanthropic capital, global health awards and Niche International BC’s to finance its antibiotic research, while tonne Beeld formation, the development of advanced supervision and defense systems, Deeptech-align investors such as Artiman Ventures, Qualcomm and Celesta Capital. These startups, each with at least a decade-long journey, are examples of how Deeptech founters navigate India’s complex landscape of multidisciplinary innovation. Manish Singhal, founder of Pi Ventures, an early fund fund that supports Deeptech artups, notes that although a decade ago, capital structures to support such businesses were limited, the market has now developed. He says that there is hybrid capital today – to utilize money mixed with government grants, corporate partnerships and philanthropic capital – available to finance the long pregnancy trips of Deeptech artups. Although the government policies recently indicated that Deeptech Innovation is possible by Startups, including the National Deep Tech Startup Policy of 2023, and support through grants and better access to research infrastructure and SIDBI’s funds for startups for startups, people say in the industry. There are hybrid capital these days – conditions mixed with government grants, corporate partnerships and philanthropic capital – available to finance the long pregnancy trips of Deeptech artuPs. Singhal argues that a government fund of funds is not the optimal way to help Deeptech artups. Instead, he believes, the kind of capital can be invested in the construction of laboratories, test facilities and prototyping of Deeptech spaces that do not have the environment to test or incubate their innovations. Arvind Lakshmikumar, founder of Tonbo Imaging, argues that Deeptech innovation requires the ability to withstand long cycles of uncertainty. “The development of hardware technology is inherently capital-intensive. The government must be prepared to invest with venture capitalists,” he says. Infrastructure vacuum supplement and patient capital are only one part of the puzzle. Infrastructure and a lack of test spaces for Deeptech innovation remain a major challenge for many startups. A critical void is the absence of actual validation environments. Indian startups often do not have access to field testing or early household customers. “By being a first customer, the government can help businesses move from prototype to deployment and provide critical field feedback and validation,” says Lakshmikumar. Take a look at the full image of a filing photo of Arind Lakshmikumar, founder of Tonbo Imaging. He argues for a mission-driven approach so that India can realize his Deeptech potential. This includes the establishment of national priorities, financing of high-risk-R & D institutions and academic spin-offs possible. The infrastructure gap is clearer among those who innovate in the hardware space. For Tanuj Jhunjhunwala, co-founder of Planys Technologies, finding test environments remained a major challenge in the first years. “You can’t test underwater robotic platforms in an office,” he says. “We needed deeper waters or environments on site to test and improve our technology.” But in India it is a bureaucratic maze to get it. Government customers and large private players often hesitate to allow tests on the spot to avoid their operations or possible failures. Jhunjhunwala, who graduated from IIT-Madras in 2014, says he was fortunate to study at an institute that provided the initial support in terms of laboratories and an incubation center to test the initial version of the underwater robot. With the recognition of this void, some ecosystem institutions began to step in. Hyderabad’s T-hub, one of the country’s largest innovation hubs, currently provides boot support in sectors and stages, while T-Works, also based in Hyderabad, provides a prototyping center with access to advanced equipment such as 3D printers and building faster without testing faster. Bengaluru’s IQP Eden and Pune’s Venture Center also offers shared R&D infrastructure, including testing settings and regulatory support for Biotech and Medech Ventures. Platforms like these are aimed at lowering access barriers and enabling collaboration between academia, industrial and early phase businesses. But taking into account the size and market ambition of Deeptech innovation in India, a handful of such initiatives are unlikely to support the scale and risk appetite needed for the Deeptech ambitions of India to really thrive. Jitendra Kumar, managing director of Birac (Biotechnology Industry Research Assistance Council), emphasizes that the council has developed significantly from a financing agency to building a robust ecosystem, which includes providing incubation support, mentorship networks and policy advocacy to better support the past decade. Kumar points out that the travels of Birac-supported startups such as Bugworks, Fibroheal (a biotechnical startup working on side proteins), offers Nayam Innovations (a startup of medical devices) and provide insights on what works and what is not in India’s Deeptech Innovation Landscape. Look at the full image a file photo of Tanuj Jhunjhunwala, co-founder of Planys Technologies. Their stories, he says, hold valuable lessons for the formation of India’s next generation innovation policy. The most important take-away meals of their travels include the need for high-end infrastructure to accelerate early access to world markets, Deeptech-specific mentoring and founder support, structured collaboration between academia, startups and industries, and the critical importance of long-term and patient capital. These examples, A according to Kumar, show that Deeptech success does not depend on breakthrough ideas not only on the systems that support and maintain it. How Tonbo did this Tonbo Imaging’s products, which include thermal cameras, night vision systems and imaging platforms of the battlefield, are currently being used by more than 25 countries, including NATO members. Lakshmikumar explains that the mates From the beginning, Kappy was aimed at being a complete manufacturer of original equipment (OEM) by owning the intellectual property behind its optics, sensors and built -in AI. This means that Tonbo had to go through years of preceding R&D before a product could even be field test. According to Lakshmikumar, its investors are in line with the need to prioritize R&D over short -term income. “There is no shortcut when it comes to Deeptech innovation,” he says. “It requires significant pre -investment, flexibility in the deployment of the capital and a tolerance for delays in commercial returns.” What has helped Tonbo thrive, despite these gaps, is a global mindset. The company recruited PhDs and Engineering Talent from around the world and has partnered with international academic laboratories and research consortia. Lakshmikumar says this early investment in human capital, “played an important role in shaping our technical capabilities and accelerating the development of the product”. Some venture capitalists slowly believe that Deeptech in India is no longer an emerging story, but a quiet developing one. “Eight years ago, there were barely investors who were willing to take an early bet on in -depth scientific businesses. That has changed today,” said Vishesh Rajaram, managing partner at Special Invest, an early fund focused on Deeptech artups. There is a growing recognition that these businesses build defensible, interdisciplinary technologies rooted in scientific breakthroughs. But evaluating them with traditional startup statistics such as fast revenue growth or five-year outlets does not work, Rajaram adds. While challenges in testing infrastructure and peer ecosystems remain, he believes that India has a unique advantage in the ability to repeat at lower costs. “You will not find ready -made laboratories if you build something that has never existed before,” he says. “But the cost of experimentation here is still dramatically lower than in most parts of the world.” The success of one rocket business or one biotechnical startup that licenses a new drug can move the whole narrative, he believes. But until then, Indian Deeptech founders will continue to do what they have done for years: Build from scratch, find it out and try not to get too little time before science catches up. Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #Long Story #Long Read Mint Specials