Deep Tech

India’s startup boom was fueled by consumer tech. Is deeptech the next frontier?

Nikhil Patwardhan

January 20, 2025 | 14 Min Read

Despite being the world’s third-largest, India’s startup and venture capital ecosystems have a relatively small footprint in the deeptech sector. But can this decade be dominated by deeptech companies?

Key Takeaways

Deeptech startups in India receive only a small share of overall private market funding, even as the country boasts the world’s third-largest startup ecosystem
Industry experts emphasise the need for more funding sources, particularly from large conglomerates, to support innovation and growth in the deeptech sector
India must focus on creating a robust "tech" ecosystem by fostering core technology development within the country
Both founders and investors need to adopt a new mindset that prioritizes long-term innovation and investment in the deeptech space

Kaushik Mudda cuts a frustrated figure. “There are barely any funds in India that haven’t passed on Ethereal in the past,” says Mudda, co-founder, and CEO of Ethereal Machines, speaking candidly about the struggles of fundraising as an Indian deeptech startup.

“We used to write investment theses and give them to investors, only to hear that the material was great but they wanted further information to be given from third party market studies/surveys/reports. These reports are usually expensive and not something startups can afford to buy,” Mudda recounts.

Founded over a decade ago by engineering graduates Mudda and Navin Jain, Ethereal Machines claims to be an innovator in 5-Axis CNC machining technology in India. CNC, or Computer Numerical Control, machines are widely used across industries to manufacture precise parts and components, with 5-Axis CNC machines able to do so with maximum precision and minimal manual intervention.

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