India’s Deep Tech Revolution: Startups, Challenges & Growth
India is home to over 9,000 active startups in the AI and machine learning sector alone. However, this is just the tip of the iceberg when it comes to the Deep tech startup ecosystem in India.
Artificial Intelligence (AI) has become a buzzword in the business world, particularly in the tech industry. While AI often serves as a prototype of what deep tech startups focus on, their scope extends far beyond it. Deep tech encompasses advanced fields like machine learning, quantum computing, robotics, biotechnology, and automation, all supported by cutting-edge research and development.
India is home to over 9,000 active startups in the AI and machine learning sector alone. However, this is just the tip of the iceberg when it comes to the Deep tech startup ecosystem in India.
Following is an in-depth analysis of the funding landscape, growth trends, and challenges for deep tech startups in India:
The Growth of Deep Tech in India
The growth of deep tech companies in India has been unprecedented in recent years, primarily backed by advancements in technologies like AI, robotics, and biotechnology. This rise is also supported by increasing opportunities for deep tech startups in India, as the country experiences a surge in innovation hubs, research institutions, and government initiatives such as Startup India and Atal Innovation Mission.
Several factors make India a conducive environment for startups in this sector. A large pool of skilled engineers and researchers, combined with affordable technological resources, allows startups to experiment and innovate. Over the past decade, the market potential of deep tech businesses has expanded rapidly, with sectors like healthcare, agriculture, and manufacturing seeking automated solutions.
Emerging Deep Tech Startups in India
Qnu Labs: Ever heard of end-to-end encryption and cyber security? That’s what deep tech startups like Qnu Labs work on. Founded in Bengaluru in 2016 the business specializes in quantum cryptography and delivers cutting-edge cybersecurity solutions to safeguard data from quantum computing threats.
With 22 patents, ₹1,167.37M in funding, and applications spanning banking, defense, and telecom, QNu Labs is driving the future of hack-proof communication and secure networks in all sectors of the digital world.
SimYog: Designing machines like vehicles or computers is complex and time-consuming, especially when ensuring they meet electromagnetic compatibility (EMC) standards. SimYog helps simplify this process by offering advanced simulation software to address EMI/EMC issues early in the design stage.
Founded in Bengaluru in 2017, this startup operates in the electronic design automation (EDA) space, creating advanced tools for automotive hardware design. With expertise in merging physical and data science, SimYog is changing the way cost-effective and high-performance automotive electronics are built.
Praan: With the AQI (Air Quality Index) reaching hazardous levels in India, creating solutions for cleaner air is a challenge, especially in today’s polluted cities. Praan is a Maharastra-based startup that uses deep tech to create solutions for air pollution.
This innovative startup develops filterless air purification technology to combat air pollution. Through newly developed technology, their products help capture harmful particles and greenhouse gases from the air. These solutions are transforming how we think about clean air, making a big impact on health and the environment.
CynLr: At a time when the most advanced robots have barely mastered walking on two feet just like humans, building robots that can see and handle objects like us is no small feat. CynLr is another deep tech startup from the Silicon Valley of India, that creates vision-based robotic systems to identify and manipulate objects with precision.
Their innovative technology is transforming industries like manufacturing, making automation smarter and more efficient. CynLr is developing technology that will soon enable robots to take over tasks that, until now, only humans could perform.
CynLr has been funded by several angels, Venture Capitalists, Incubators, and Accelerators. Wondering how to find investors for deep tech startups in India? YNOS Angels provides a comprehensive database of angel investors, making it easier for entrepreneurs to discover and connect with the right funding options for their ventures.
With this, founders can streamline their investor search based on various criteria, including location, commonly invested sectors, recent investment activities, and even the educational backgrounds of angel investors in India.
Mihup: Founded in Kolkata in 2016, Mihup is a deep-tech AI startup transforming customer interactions. Focusing on speech recognition in regional languages and IT solutions for communication, Mihup empowers businesses with sophisticated tools.
Their conversation intelligence platform improves contact center performance through voice-based support and smart chatbots for seamless customer communication. Serving industries like BFSI, BPOs, eCommerce, logistics, and automobiles, Mihup is steadily transforming how businesses connect with their customers.
The Challenges For Deep Tech
While deep tech is rapidly growing in India, there’s still a long way to go in fully adopting these innovations. Challenges like scalability, funding, and market readiness continue to slow the progress of many promising startups.
Talent Migration and ‘Brain-Drain’:
Deep tech sectors like AI, quantum computing, and biotechnology require highly skilled professionals with specialized knowledge. However, many highly skilled professionals leave the country in search of better career opportunities, advanced research facilities, and improved quality of life available in foreign countries.
This brain drain creates a talent gap in the deep tech sector, where specialized knowledge is crucial for research and product development. As a result, startups often struggle to find and retain top talent, slowing their growth and innovation capacity. Addressing this issue by creating better work environments, competitive salaries, and growth opportunities within India is essential for the sector’s long-term success.
Commercializing Deep Tech Innovations:
One of the biggest hurdles for deep tech startups in India is turning great ideas into successful products or services. Many deep-tech solutions are born from research labs or academic institutions, making them complex and highly specialized.
Taking these technologies from an innovation to a sellable market-ready product often requires time, testing, and significant resources. Startups may struggle to find the right strategies to make their innovations appealing and practical for commercial use, delaying their market entry.
Funding Challenges for Indian Deep Tech Startups:
Raising funds is a critical challenge for deep tech startups in India. Since these startups often work with advanced technologies that take longer to develop, investors may be hesitant due to delayed returns on investment.
Unlike traditional startups with faster growth models, deep tech ventures require patient capital and specialized investors who understand the risks involved. Limited access to such funding can slow down the development and scaling process.
Incubators are a great choice for deep tech startups because they offer the specialized support these startups need. They provide mentorship, resources, and guidance tailored to help deep tech companies grow and succeed. The YNOS Incubators product makes it easy for startups to find the right incubators by offering search filters based on location, available funding options, and support schemes.
Long Development Cycles and High Costs:
Deep tech startups often face long development timelines due to the nature of their technologies. For example, products in fields like robotics or nanotechnology require extensive research, testing, and refinement before they are ready for commercialization.
These long cycles not only delay revenue generation but also demand sustained financial support, increasing pressure on startups. The high cost of R&D, prototyping, and regulatory approvals can strain limited budgets, especially without continuous funding.
Limited Market Awareness and Adoption:
Many deep tech innovations solve complex problems that may not be easily understood by potential customers or industries. Educating the market about the benefits and practical applications of these technologies can be a slow and challenging process.
Without proper awareness, businesses may be reluctant to adopt unfamiliar solutions, limiting the initial market demand. This lack of early adopters can create hurdles in proving the market potential of deep tech innovations, which again affects the startup’s growth and funding prospects.
Despite these challenges, India’s deep tech ecosystem continues to evolve, with increased support from government initiatives, mentorship programs, and platforms helping startups connect with the right investors and talent.
The Future of Deep Tech in India
What was once just a figment of our imagination, is now becoming a reality with deep tech. Indian startups are working on technology that is on the verge of tomorrow’s tech. The sharpness of these cutting-edge advancements is creating a massive change in the country. The economic impact of deep tech startups in India cannot be ignored, and that’s the reason why the Government of India is taking special interest in providing an environment that promotes their growth.
While the key industries adopting deep technology in India are mostly in cyber security, artificial intelligence, space travel, and biotech, there is something called the “drip effect” that will benefit almost every industry in the country. The advancement in deep tech will make useful technologies more accessible and cheaper, leading to the overall growth of the country.