India ranks 6th amongst the top 9 DeepTech ecosystems globally: nasscom report

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With the acceleration of frontier technologies such as Artificial Intelligence (AI), India’s DeepTech sector has witnessed a steady growth over the last few years. DeepTech start-ups such as Agnikul, GalaxyEye, HealthPlix, Sarvam AI, Peptris among others are emerging in areas of healthtech, sustainability, AI, space tech etc, tackling problems of strategic importance for India.

In line with this, nasscom and Zinnov have unveiled the 2nd edition of their DeepTech start-up landscape report series, titled ‘India’s DeepTech Dawn: Forging Ahead’. The report deep dives into the key trends across various dimensions, including ecosystem expansion, technology focus, funding, M&As, IP, and sectoral focus, in addition to challenges that the DeepTech ecosystem faces and the imperative for action.

India is home to more than 3,600 DeepTech startups, with over 480 being established in CY2023 —2X higher than the number established in 2022. Of these 480 startups launched in 2023, over 100 are Inventive DeepTech firms that have developed intellectual property or innovative solutions in new domains. Notably, 74% of the DeepTech startups established this year have concentrated on AI, a significant increase from 62% in the period from 2014 to 2022.

The global downturn in startup funding has also seen an impact in the Indian DeepTech startup ecosystem. In CY2023, Indian DeepTech startups secured $850 million in investments (decline of 77% over CY 2022), with AI startups garnering a majority share of this. Both early and late-stage deals have witnessed a reduction of over 60% this year. This downturn is primarily attributed to smaller average investment sizes at both the seed and late stages and investors remaining cautious largely due to the extended gestation periods typical of these ventures. 31 M&A deals were reported in CY 2023, a decline of about 45% as focus shifted to accelerate tech capabilities that provide the AI edge.

The DeepTech startup ecosystem is also witnessing increased thrust on building solutions that are sector focussed. The report highlights 4 sectors that are of strategic importance including Space and Defence, Healthcare, Automotive and Industrial Manufacturing. 500+ startups across these 4 sectors are building solutions for electrification, industrial robotics, surveillance and drones, satellite imagery, propulsion systems, cancer diagnostics etc.

Although the majority of DeepTech startups have traditionally been concentrated in established hubs, owing to a mature ecosystem and talent access, there is growth in emerging hubs being witnessed. 110+ DeepTech startups were incepted in emerging hubs in 2023 – a twofold increase from 2022 and the highest growth in the last five years, driven by an expanding talent pool, cost advantage, supportive ecosystems, and proactive policies enhancing innovation in these areas.

Jeyandran Venugopal, Chair, Nasscom DeepTech Council said, “Deeptech is becoming increasingly integrated into the fabric of innovation. Areas such as AI, Quantum Computing, Space tech, next gen robotics and others will come together in interesting ways and be applied across every domain from education, entertainment, commerce, agriculture, industrial manufacturing, mobility, and several others. India, with its deep talent base and traditional strength of producing top notch STEM talent is well positioned to play a dominant role in this technology led societal transition process”.

The report also highlights the key challenges for the DeepTech ecosystem and the need for an integrated approach to accelerate its growth. While India is ranked 3rd in the technology startup ecosystem, it is at the 6th position for DeepTech startups.

Sharing her views on the Indian DeepTech start-up ecosystem, Kritika Murugesan, Head, Nasscom DeepTech said, “For India to be in the top 3 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”.

Today we live in a T-shaped world. While broad knowledge across the ecosystems is critical, deep insights and expertise of Subject Matter Experts help organizations leapfrog. At IndiaTechnologyNews, we cover much more than news, views and analysis, and we feature SMEs to help translate their knowledge to wider audiences. Reach me at editor@indiatechnologynews.in

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