India too has accepted this urgency through its policy direction in Budget 2026, reinforcing its intent to strengthen strategic technology capabilities and deepen the innovation ecosystem.
A key development include when DPIIT extended startup india recogfnoition for deep tech companies to 20 years and raised the turnover threshold to ₹300 crore.
In words of Chetan Mehta, Founding Partner, Aum Ventures, which launched its second venture capital fund of $80 million (₹750 crore) corpus aimed at backing early-stage DeepTech and IP-led startups , “India is at a unique inflection point where policy support, talent, and capital availability are converging to create unprecedented opportunities for DeepTech and innovation.”
While launching the fund Mehta said that he believes that IP/tech businesses need to be evaluated on their ability to compete globally from the very beginning and have to be nurtured accordingly.
What the new fund is ?
The new India Innovation Fund II is a SEBI-registered Category II Alternative Investment Fund (AIF) focused on early-stage investing.
The corpus of the fund is $80 million crore with a check size of $750,000 to $2 million in initial investments then provide follow on capital upto Series A/B stages.
Mehra said that over its lifecycle, Fund II is expected to support approximately 25–30 portfolio companies.
Who can benefit from this fund?
Talking to CNBC TV18 Mehta said that the primary beneficiaries of the India Innovation Fund II include:
Early-stage DeepTech founders : Startups at pre-seed or seed stage building IP-led technologies in sectors like AI, semiconductors, SpaceTech, and defence will be the main focus.
Engineering-heavy startups with long development cycles: Companies that require patient capital due to long R&D timelines, especially hardware and frontier tech ventures.
Founders building globally scalable technologies: Startups aiming to compete in international markets rather than only domestic demand.
Research-driven entrepreneurs and technical teams: Including scientists, engineers, and domain experts from institutions such as ISRO, IITs, and semiconductor industry backgrounds.
DeepTech startups seeking follow-on capital : Portfolio companies will also have access to funding support up to Series A and B stages.
Why the fund is being launched now?
Mehta said that the current launch reflects how India’s DeepTech ecosystem has matured since 2022.
He said that ecosystem has now stronger government policy support for strategic technologies, increased private sector participation in DeepTech , improved research and engineering capabilities, growing success stories in SpaceTech and semiconductors.
All of the above rising willingness of enterprise and government customers to adopt indigenous technologies now exists, he added.
How the investment approach works
Asking about how will they decide where to invest, Mehta said that Aum Ventures invest at the pre-seed and seed stages, so they prioritize exceptional founders over polished metrics.
“In Fund 1, many of our founders have been ex ISRO scientists, senior semiconductor professionals as well young ambitious talent coming out of IITs.”
Explaining the detailed criteria what he look at while making his decisonm he highglighetd several points such as:
- Deep technical expertise and founder-market fit.
- A large and meaningful market opportunity.
- Proprietary technology or sustainable competitive advantage.
- Evidence that the innovation solves a real customer problem rather than being technology in search of a use case.
- Early customer validation, pilot programs, or commercial traction where applicable.
- A capital-efficient roadmap and the ability to execute through technical uncertainty.
The long road for DeepTech innovation
When Mehta was asked about the hurdles that still creates bottlenecks, he said that the biggest challenge is rarely the technology itself; it’s crossing the commercialisation gap.
He added that finding early customers willing to adopt novel technologies and ccessing sufficient patient capital through long product development cycles is still a big concern.
He also added that attracting multidisciplinary talent across engineering, product, and business functions which can build a tream to scale globally while maintaining capital efficiency is majour area of concern.
Seperately he stated that navigating regulatory approvals and procurement processes, particularly in aerospace and defence is also a key hurdle.
Building technologies for the world, from India
Mehta believed the next five years could be transformational for Indian DeepTech as it has a unique combination of engineering talent, cost advantages, supportive policy initiatives, and an expanding domestic market that can serve as a launchpad for global innovation.
Areas where he is particularly optimistic includes:
- AI infrastructure and enterprise AI, especially vertical applications with measurable business outcomes.
- SpaceTech, spanning satellite infrastructure, launch technologies, communications, and downstream applications.
- DefenceTech, driven by increasing domestic demand and export opportunities.
- Semiconductors, including chip design, EDA tools, specialty materials, and manufacturing enablement.
- Industrial automation and robotics, particularly for manufacturing and logistics.
- Energy and climate technologies, including advanced materials, batteries, and grid innovation.
Mehta concluded saying India is positioned to become a net exporter of DeepTech innovation, with globally significant companies emerging from these sectors.
Also Read: A ₹100 crore category II AIF launched for pre-IPO growth investments
