India’s deeptech startups are beginning to reach a stage that was largely out of bounds for traditional growth investors: they have established revenue streams, some evidence of unit economics and are starting to grow in a more stable way.
The shift is also showing up in larger cheques and a broader mix of investors entering the sector, according to industry experts, even as growth funds confront the difficulty of evaluating businesses with long development cycles and technical risks.
“Today there are more of these businesses that have established revenue streams, showing some unit economics, and are now starting to grow in a more stable way,” said Dushyant Singh, managing director at Playbook Partners, a sector-agnostic growth fund.
Playbook joined , which made the company India’s first spacetech unicorn at a $1.1 billion valuation in May.
At least six of the top 10 deeptech deals so far this year were rounds of $30 million or more from private-equity and venture-capital investors, according to Venture Intelligence data.
Gaja wrote a roughly ₹95 crore (around $10 million) cheque in the $74 million second tranche of Sarvam’s $300 million Series B and is actively scouting for deeptech and artificial intelligence (AI) bets. Avataar Ventures led Ethereal Machines’ $29 million round, while Exponent Energy’s $21 million round was led by 360 ONE. The asset manager has raised a ₹1,500 crore fund to back defence, aerospace and frontier-tech companies.
Electric-vehicle manufacturer River Mobility raised $120 million in equity and debt from Elev8 Venture Partners, Claypond Capital and existing investors. It was the first time the company raised domestic capital.
But a large round does not necessarily mean a deeptech company has reached the growth stage.
Awkward middle
Last week, Airbound, an unmanned logistics and delivery drone startup, raised $37 million in a Series A led by Greenoaks, with participation from DoorDash, Physical Intelligence founder Lachy Groom, Lightspeed and Humba Ventures. Lightspeed’s India-specific fund was the only local participant.
Founder and chief executive Naman Pushp said Airbound began looking to outside investors only after exhausting all domestic options.
“We were just shuttered between the growth and early stage team,” he said of conversations with an Indian fund, which he declined to name. “Initially it was the growth team evaluating us because the round size is for the growth team. They realised that they cannot evaluate us via growth metrics, and moved us to their early-stage team. But for that team, which normally writes cheques for $10 million and below, writing a $30 million cheque hurts.”
Growth investors typically enter after a company has demonstrated product-market fit, a threshold that can struggle to meet because of their longer science-to-commercialization timelines.
“Given the significant investments being made in this domain in the US, the buzz and fear of missing out on this wave are much stronger,” said Rishabh Jain, director, digital, technology & consumer investment banking at Avendus Capital. “Funds that previously did not invest in deep tech are now spending more time evaluating the sector.”
Why now
Geopolitical tensions and supply-chain risks are adding to the appeal of homegrown technologies. , the conflict in West Asia and potential supply-chain shocks from abrupt Chinese restrictions on special technologies have led countries including India to place greater importance on developing domestic capabilities. This is strengthening the strategic case for sectors such as aerospace, defence, spacetech and semiconductors, particularly as the government deploys capital through mechanisms such as the ₹1 trillion Research, Development and Innovation (RDI) Fund.
But geopolitics is only part of the story.
“Don’t forget that we’re in the middle of a compute super-cycle as well,” said Debraj Banerjee, general partner at Fundamentum Frontier Advisors (F2A), a ₹3,000 crore deeptech and consumer AI-focused growth fund. “Homegrown technologies are seeing a sovereignty premium, which is why you’re also seeing more growth funds looking to do deeptech.”
Deeptech companies have raised $2.3 billion across just under 200 deals so far this year, according to Tracxn, compared with $1.62 billion across 453 deals in all of 2025. The numbers point to larger rounds despite lower deal activity.
But greater investor interest has not yet translated into more deployments, which industry insiders say is still another six to 12 months away.
The lag stems from a lack of underwriting capabilities.
Underwriting gap
Banerjee of F2A said domestic investors are struggling with a mismatch in mental models.
“Some fund managers are finding it tough to switch over from the SaaS metric mindset to a deep tech mindset. That’s the major hangover,” he said. “If you end up visualising a deep tech business like a SaaS business, then you’ll never make those bets.”
Playbook’s $250 million maiden fund will allocate roughly 50% to frontier tech and AI-native businesses, including defence, precision manufacturing, healthcare and battery storage. But it still looks for risks it can underwrite.
“We are happy to underwrite risk along one vector,” Singh said. “If there are multiple directions of risk, that might cause us to say maybe come back later.”
That interest, however, has yet to translate into easier access to domestic growth capital.
During , the company had reached advanced talks with A91 Partners, which pulled out at the last minute over concerns around viability and projected revenue growth, according to two people familiar with the matter.
Narayana Murthy’s family office, Catamaran Ventures, which has invested in deeptech outside India, most notably in SpaceX, confines itself to execution-led manufacturing bets in India and takes limited partner positions in venture funds backing deeptech.
“Growth stage, we will absolutely look at it directly, but not many IP-oriented deep tech firms have still reached that growth stage,” said Deepak Padaki, president of the fund.