The Indian Deeptech start-up ecosystem continues to witness a significant growth trajectory on the back of an exponential rise of emerging technologies and their adoption across sectors. The National Association of Software and Services Companies (NASSCOM), in partnership with Zinnov, a global management and strategy consulting firm, launched its first in-depth Deeptech start-up report, titled, “India’s Deeptech Start-ups – Poised for Impact”.
2021 has been a landmark year for India’s Deeptech start-ups with the ecosystem witnessing 1.6 times growth in equity investment, compared to 2020. With over 3000 Deep Tech start-ups as of 2021, the ecosystem has grown at a staggering rate of 53 per cent CAGR in the last 10 years, growing at par with the Indian tech start-ups. Over 210 Deeptech start-ups were added in CY2021.
The Indian Deeptech start-ups are well on their way to creating a niche for themselves in the global start-up arena. Although in its nascent stage compared to other economies such as the USA, Europe, Israel and China, the Indian Deeptech ecosystem is expanding fast. The industry is witnessing more start-ups emerging to solve global challenges of clean tech, zero hunger, smart cities and climate actions, thus accelerating India’s path to achieving sustainable development goals across segments.
“The Indian Deeptech ecosystem today has truly come of age. These start-ups are playing a vital role in creating solutions for sustainability goals, from smart manufacturing to reliable healthcare,” Debjani Ghosh, President NASSCOM said. “The ecosystem has also fortified the country’s job creation with over 4000 people being employed across 14 potential Deeptech Unicorns and is expected to increase by 2 times in headcount by 2026,” she added.
Deeptech is getting deep-rooted into start-ups DNA. This has led to a significant momentum in the Deeptech space with increased interest from equity investors and VCs. In 2021, over 270 unique start-ups raised $2.7 billion across 319 deals, with AI and Big Data & Analytics being the top technologies raising equity investments.
Owing to its strong fundamentals for scaled start-ups, seed stage start-ups have witnessed a 2.3-fold growth in equity investments in 2021, as compared to 2020, raising a total of $186 million funding in 2021. Amongst verticals SCM and logistics were the most funded sectors in 2021, with Deeptech start-ups raising funding across use cases like drone delivery, autonomous delivery bots, cold chain monitoring and fleet management.
India’s agritech sector also witnessed a boom in funding in 2021 owing to multiple early and late-stage funding. Deeptech start-ups have a presence across not just traditional business verticals, but also newer verticals such as environment tech, aviation, maritime & defence and life sciences.
Further, with a growing focus on digitization, enterprises are increasingly partnering with Deeptech start-ups to build niche tech capabilities and product portfolio expansion. Amongst the 30+ M&A deals in 2021, 17 per cent of the total deals pertain to deeptech start-ups.
From the 3000+ Deeptech start-ups, over 500 are classified as Inventive Deeptech start-ups. These are companies that are creating products and solutions with the potential to develop new intellectual properties, backed by scientific advances and fundamental research, thus emphasizing the skilled Deeptech talent that India has to offer.
