Deeptech funding exceeds $500 mn in 2023: Report

The use of deep technologies is becoming mainstream in Indian startups for improving organisational efficiency, reducing operational costs, and automating internal operations. In 2023, the deeptech funding crossed $500 million and the investment in such technologies will continue to see an upward trend in 2024 too, according to a report by industry body Nasscom and management consulting firm Zinnov. With the focus shining bright on generative artificial intelligence, 70% of the start-up founders are embedding artificial intelligence (AI) in their solutions. 

The Nasscom-Zinnov report suggests that going forward, for developing deeptech ecosystem, the focus must be on factors like identifying key sectors for DeepTech investment, fostering an integrated approach for innovation, market connections, and support in areas like testing, patent filing, certifications, and training. Initiatives to nurture innovation, co-investment programs, and easing up regulatory compliance would also help.

“India’s tech startup ecosystem has truly matured attracting more than $70 billion in cumulative funding between 2019 to 2023. This growth is now anchored in a strategic shift towards improving business metrics and revenue streams. DeepTech, a key innovation driver, accounts for just 14% of this funding, and needs an exponential acceleration to build India’s Deeptech ecosystem. The proliferation of tech start-ups in tier-II and III cities marks the ecosystem's resilience,” said Debjani Ghosh, President, Nasscom.

According to the Nasscom-Zinnov Tech Start-up Survey-2023, about 60% start-up founders reported increased revenue and profitability in 2023. A significant portion of unfunded tech start-up founders anticipate higher revenues in 2024 compared to their funded counterparts. India is the third largest tech startup ecosystem in the world with over 950 of them founded in just 2023. In the last ten years, there have been 31,000 startups, with cumulative funding exceeding $70 billion between 2019 and 2023.

Further, driven by democratisation of technology, Indian startups have increasingly diversified into tier II and III in 2023. These cities and towns are now being referred to as emerging hubs, with 40% of tech startups establishing their base in these locations.