In 2025, deeptech financing increases as startups expand beyond labs
India’s deeptech startup sector saw a slight rise in funding in 2025, with investors increasingly backing companies that have moved beyond early experiments and are closer to commercialisation.
According to data from Tracxn, deeptech startups raised $1.55 billion across 264 deals in 2025 so far, compared to $1.4 billion in 2024. Venture capitalists expect annual deeptech funding to remain in the $1–1.5 billion range over the next two years, before picking up in 2027–28, supported by government policies, the upcoming Research Development Incentive (RDI) fund, and a maturing startup pipeline.
Early-stage funding dominates
Early-stage deals accounted for over half of total funding, with startups raising $850 million, up from $690 million last year. However, very early or initial cheques declined to $277.4 million, down from $332.9 million in 2024, indicating more selective investing.
Investors say funding levels are improving but still limited. Deeptech-focused funds are prioritising enterprise tech, healthcare, industrial tech, and frontier technologies, while expecting more scale-up rounds from 2026 as startups mature.
Semiconductors and spacetech lead
Within deeptech, semiconductors and spacetech emerged as top-performing sectors:
Semiconductor startups raised $191.1 million in 2025, a sharp jump from $41.4 million in 2024, driven by government incentives, supply-chain concerns, and India’s push to build a domestic chip ecosystem.
Spacetech startups raised $93.7 million so far in 2025, supported by large funding rounds such as Digantara’s $50 million and Agnikul’s $17 million.
Investors said growing global demand for satellite communication and defence-related technologies is helping spacetech startups gain faster traction.
Long road ahead
Despite improving investor interest, founders say fundraising remains challenging due to high infrastructure costs, long development cycles, and the need for specialised talent. Investors are becoming more patient, especially with hardware-heavy startups, but large funding rounds typically come only after startups show clear revenue visibility, such as confirmed orders worth Rs 10–50 crore.
Industry experts estimate India has around 300 true deeptech startups, but fewer than 30 have raised more than $10 million, highlighting the thin availability of growth capital so far.
Overall, while deeptech funding growth remains gradual, investors and founders agree the sector is moving in the right direction, with consolidation and mergers expected as the ecosystem matures.