India Ranks Sixth Globally in Deeptech Startups: Nasscom Report

India is emerging as a significant player in the global deeptech landscape, ranking 6th according to a recent Nasscom-Zinnov study. With over 3,600 deeptech startups, the country boasts a thriving ecosystem for innovation in artificial intelligence, robotics, and other cutting-edge technologies.

Startup Surge and AI Dominance

The report, titled "India's deeptech dawn: forging ahead," highlights a remarkable growth of deeptech startups in 2023. Over 480 new startups entered the space, doubling the figures from 2022. Notably, over 100 of these startups focus on developing intellectual property or innovative solutions in new domains, showcasing India's potential for original deeptech contributions.

However, a major hurdle lies in funding. Despite the surge in startups, Indian deeptech witnessed a concerning 77% dip in funding compared to the previous year, securing only $850 million in investments. Both early and late-stage deals have taken significant hits, attributed to smaller investment sizes and investor cautiousness due to the extended gestation periods of deeptech ventures.

Mergers & Acquisitions and Shifting Focus

The report also notes a decline in mergers and acquisitions (M&A) deals by about 45% in 2023. This shift in focus might be attributed to a growing emphasis on internal tech development rather than external acquisitions to gain an edge in AI.

Sector-Specific Solutions and Rise of Emerging Hubs

A promising trend in the Indian deeptech ecosystem is the increased focus on building sector-specific solutions. The report highlights four key sectors:

• Space and Defense: This area sees startups developing solutions for satellite imagery, propulsion systems, and surveillance technologies.

• Healthcare: Deeptech startups are innovating in cancer diagnostics and other crucial areas.

• Automotive and Industrial Manufacturing: Electrification, industrial robotics, and drones are key areas of focus.

Furthermore, the report emphasizes the rise of emerging deeptech hubs across India. With a two-fold increase in new startups in 2023 compared to 2022, these regions are experiencing significant growth driven by factors like:

• Expanding talent pool

• Cost advantages

• Supportive ecosystems

• Proactive policies promoting innovation

The Road Ahead: Policy Support and Funding Solutions

Despite the progress, India faces challenges to truly become a global deeptech leader. As Kritika Murugesan, head of Nasscom Deeptech, points out, key areas need focus:

• Access to patient capital: Deeptech ventures require long-term funding to develop and scale their products.

• R&D partnerships: Collaboration between academia and startups is crucial for fostering next-generation innovation.

• Streamlined government procurement: Facilitating the adoption of Indian-developed deeptech solutions by the government would boost the sector.

• Deeptech policy implementation: The effective implementation of the recently proposed deeptech policy can significantly impact the ecosystem.

By addressing these challenges and fostering a supportive environment, India can leverage its deeptech potential to become a global leader in innovation.

Conclusion

India's deeptech ecosystem is rapidly evolving, with over 3,600 startups making significant strides in various technological domains. The country's focus on AI and sector-specific innovations positions it as a critical player in the global deeptech landscape.

However, to climb higher in global rankings, targeted support in the form of patient capital, robust R&D partnerships, streamlined government procurement, and effective policy implementation is essential. The findings from the Nasscom-Zinnov study highlight the potential for India to further solidify its position as a leader in deeptech innovation.