India Ranks Sixth Globally in Deeptech Startup Ecosystems: Nasscom Report

According to a recent study by Nasscom and Zinnov, India has over 3,600 startups working in advanced technology fields like deeptech, ranking 6th globally in this sector.

In the year 2023 alone, over 480 new deeptech startups were founded, twice the number established in 2022. This information is detailed in the report ‘India’s deeptech dawn: forging ahead’. According to the report, more than 100 of these startups have created new intellectual property or innovative solutions in emerging areas. In 2023, 74% of the new deeptech startups focused on AI, a notable rise from 62% recorded between 2014 and 2022.

Challenges And Recommendations

Despite India’s global recognition for its extensive AI talent pool and large developer community, it ranks sixth in deeptech startups. Kritika Murugesan, head of Nasscom Deeptech, highlighted key areas for India to improve its ranking. These include providing patient capital, fostering research partnerships with academia, streamlining government procurement processes, and implementing the deeptech policy proposed in 2023.

Funding Trends and Economic Impact in 2023

According to the report for the year 2023, funding for Indian deeptech startups decreased by 77% compared to the previous year, with a total of $850 million raised in investments. Early- and late-stage funding deals decreased by more than 60% this year. This decline is attributed to smaller average investment sizes at the initial and advanced stages, and investors are being cautious due to the longer timeframes these ventures typically require to mature.

Additionally, there were 31 mergers and acquisitions in 2023, marking a 45% decrease as there was a greater emphasis on enhancing technological capabilities that offer advantages in AI.

Sector-Specific Innovation in Deeptech

A notable trend observed is deeptech startups tailoring solutions for specific industries. The report identifies critical sectors of space and defence, healthcare, automotive, and industrial manufacturing. Over 500 startups are developing solutions such as electrification, industrial robotics, surveillance technologies, drones, satellite imagery, propulsion systems, and cancer diagnostics.

Emerging Hubs and Future Prospects

More than 110 deeptech startups emerged in new hubs in 2023, marking a two-fold increase from 2022 and the highest growth in the past five years. This growth is driven by factors like an expanding talent pool, cost advantages, supportive ecosystems, and proactive policies that foster innovation in these areas.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.