Deeptech Is The Final Frontier For Indian Startup Ecosystem: Peak XV’s Rajan Anandan

VC firm Peak XV Partners’ managing director Rajan Anandan has said that the deeptech sector is the “final frontier” for the Indian startup ecosystem.

“We’ve seen an extraordinary surge of innovation of startups in India and I think the final frontier really is deeptech,” Anandan said at the ongoing Startup Mahakumbh.

While India currently leads in sectors like fintech, ecommerce and quick commerce in terms of innovation, the country has just started working on the deeptech sector, he added.

However, Anandan expressed confidence that India will emerge successful in deeptech as well. He cited India’s engineering talent pool, rapidly growing economy and favourable government policies as the reason behind his confidence.

Talking about Peak XV Partners’ focus on deeptech, Anandan said, “We’re very actively investing in deeptech from semiconductor to space to battery recycling to biosciences to AI.”

The VC firm counts startups like InCore Semiconductor, Mindgrove, Horizon Quantum, among others, from the deeptech sector in its portfolio.

Anandan was speaking during a session titled, “India as a Product Nation: Creating Category Defining Startups for the Globe”. The session was moderated by Endiya Partners’ MD Sateesh Andra, and also saw participation from Qure.ai CEO and cofounder Prashant Warier and Competition Commission of India (CCI) member Anil Agrawal.

The comments come at a time when there seems to be an ongoing shift in India, with founders, investors and government increasing their focus on the deeptech sector.

In her Budget 2025-26 speech, finance minister Nirmala Sitharaman said that the government would explore setting up a fund of funds (FoF) for the deeptech sector to “catalyse next generation startups”. The proposed FoF is expected to benefit capex-heavy sectors like EVs, rocket engines, robotics, nanotechnology, semiconductors and AI.

In January, industry body NASSCOM also urged the Centre to establish an INR 10,000 Cr fund for deeptech startups seeking early stage investments.

While India’s deeptech sector is still at a nascent stage, a number of startups like Pixxel, Mindgrove, Agnikul Cosmos have made a name for themselves in recent years.

As a result, several VCs are betting on such startups. For instance, Riceberg Ventures recently rolled out a $20 Mn (around INR 173.4 Cr) fund to invest in deeptech startups. Last year, Yali Capital launched INR 810 Cr (around $97 Mn) early stage fund to back startups operating in the deeptech sector.

As of October 2024, India was home to more than 46,000 startups operating in the deeptech segments, including AI, biotechnology, nanotechnology, robotics, and AR/VR.