India’s DeepTech Ecosystem Adds 480 New Startups In 2023 Despite 77% YoY Funding Dip

India’s DeepTech startup ecosystem has seen growth despite facing a huge decline in funding during the past year. The country now hosts over 3,600 DeepTech startups, with more than 480 new startups established in 2023 alone.

According to a nasscom-Zinnov report, the noted growth in country’s DeepTech space last year was predominantly due to a surge in Artificial Intelligence (AI) startups, which accounted for 74 per cent of the new ventures.

Despite the global downturn in startup funding, Indian DeepTech startups managed to secure USD 850 million in investments in 2023. This figure represents a sharp 77 per cent decline from the previous year, pointing to a cautious investor sentiment due to the extended gestation periods typical of DeepTech ventures. 

The report highlighted a reduction in both early and late-stage funding rounds, signaling a challenging funding landscape for these innovative enterprises.

The emergence of new DeepTech hubs across India is a trend noted in the report, with over 110 startups launching in emerging locations in 2023. This doubling from 2022 is attributed to factors such as an expanding talent pool, cost advantages, supportive ecosystems, and proactive government policies fostering innovation outside traditional urban centers.

However, the report called for a concerted effort to elevate India’s DeepTech ecosystem to global prominence. Key recommendations included focused policies, patient capital investment, robust intellectual property frameworks, strengthened procurement mechanisms and enhanced R&D infrastructure. 

In a statement, Kritika Murugesan, Head, nasscom DeepTech said, “For India to be in the top three DeepTech startups ecosystem, key areas that need support are – access to patient capital for DeepTech startups to build and scale their products, strong R&D partnerships with academia for nextgen innovation, streamlining government procurement for startups to build India specific solutions and implementation of the DeepTech Policy that was tabled in 2023.”