New Delhi: In 2023, the number of deeptech startups in India surged significantly, nearly doubling compared to 2022, however, this growth was accompanied by a steep decline in funding, which plummeted by approximately 77%, industry body NASSCOM reported this week.
This drop in funding affected both early and late-stage investments, with late-stage funding experiencing the most significant decrease, Nasscom said.
Despite the funding challenges, the deeptech ecosystem in India showed resilience. The rise in new deeptech startups, particularly in emerging hubs, reached a five-year high. AI and IoT remained pivotal, accounting for about 50% of patent filings by these startups. Additionally, 86% of AI-backed deeptech startups managed to secure funding in 2023, underscoring the growing importance and application of AI technologies in the sector, experts believe.
India’s deeptech ecosystem now ranks third globally, driven by a strong talent pool and a supportive environment for innovation. However, the lack of “patient capital” remains a critical challenge, limiting the scalability of these startups. Nasscom has recommended the government to enhance the availability of patient capital, improve the intellectual property framework, and fast-track the implementation of the National DeepTech Startup Policy (NDTSP) to support the ecosystem’s growth.
