Will the next SEDEMAC go public in the lifetime of a VC fund?

The recent listing of SEDEMAC Mechatronics on the Indian public markets is among the most consequential proof points in India’s deeptech journey. What Shashikanth Suryanarayanan and his students Amit Dixit, Raj Panse, and Manish Sharma built at IIT Bombay—a globally competitive powertrain electronics enterprise grown from first-principles academic research—is the role model India’s deeptech innovation ecosystem has long required. Having backed SEDEMAC in August 2008 from the first Nexus Ventures fund and staying invested for 17 years, the milestone carries particular significance for me. 

The decision on how to pace the growth and build a lasting institution like SEDEMAC was ultimately taken by the founders with support from the Board. There were many factors at play—the availability of the market, development of the technology itself, and capital available for investment in R&D, manufacturing and sales and marketing. Unlike founders around them raising large rounds and burning capital for growth, the SEDEMAC founders took a call to build in a very deterministic and capital efficient manner. This led to the situation that Nexus could not exit during the lifecycle of the fund, and we had to extend the fund across multiple years to get our exit. As investors look to back the next generation of deeptech companies like SEDEMAC, one important question that is in everyone’s mind is what must change so that the next comparable company takes eight years to reach the same destination, not 17. 

The answer lies not in any single intervention, but in the architecture of an ecosystem that SEDEMAC’s journey has helped define. The most consequential element of that architecture is the early conviction of a lighthouse customer. SEDEMAC’s first commercial breakthrough came through an engagement with TVS Motor, enabled by Suryanarayanan’s lab and talent pool at IIT Bombay. That relationship did what no grant, incubation programme, or investor validation can replicate—it embedded frontier research into the rigorous discipline of industrial deployment. Mahindra Powerol followed, and with two marquee industry partners anchoring its credibility and shaping its product roadmap, the path to institutional capital became simpler for the company. The mechanism this sequence reveals is instructive: committed industry customers create investor confidence, which enables capital formation, which then supports scale—and scale deepens the enterprise relationships that sustain it. This virtuous cycle originating with industry co-development is what compresses the deeptech timeline. 

The critical policy question is therefore how to make such relationships systemic and structural rather than contingent on an individual’s networks. India has instructive precedents to build upon. Government agencies such as iDEX and IN-SPACe are issuing specific problem statements alongside capital, which enables entrepreneurs to align innovation with industry requirements and produce relevant, adoptable solutions across critical value chains. Defence and aerospace organisations have historically served this function in the most advanced deeptech economies in the world, and India’s defence procurement ecosystem is beginning to move in this direction. The big gap that remains is corporate India’s participation. Given the structural characteristics of India’s defence procurement timelines, large private enterprises must be equally engaged in defining problems, co-funding validation, and committing to early purchase. Structured incentives—additional tax benefits or matching grants at the translational stage—would make that engagement economically rational rather than merely aspirational. 

A purpose-built capital architecture must accompany this demand-side pull. The ₹1-lakh crore RDI Scheme, TDB, and BIRAC together address critical gaps across the funding continuum, and the government’s direction in enabling risk-appropriate financing is laudatory. The DPIIT- SIDBI Fund of Funds model, which has demonstrated its effectiveness in crowding domestic and international capital supported by specialist fund managers, offers the clearest blueprint for extending this approach to deeptech at scale. Academic incubation facilities must evolve in parallel—not as providers of infrastructure alone, but as providers of seed capital and mentoring akin to what venture capital provides. The IIT Madras fund and SINE’s YPoint initiative at IIT Bombay represent early proof points of what this model can produce; the opportunity now is to make this programmatic across India’s premier institutions, with experienced fund managers partnering with academia to deploy capital with the rigour the asset class demands. Every institution must also establish a formal IP licensing function—a structured, institutionalised pathway for research-originated intellectual property to be transferred to startups rather than remain embedded in laboratory notebooks. 

India also lacks the intermediary capital formation infrastructure that can help scale deeptech companies faster. Investment banks and law firms with genuine fluency in deeptech IP, equipped to help frontier ventures raise capital, structure transactions, and protect their intellectual property—are still too few in number and too unevenly distributed. This specialist layer took decades to develop in the US and Israel; its nascency in India’s ecosystem adds friction to every transaction. 

Sustaining this system over the long term requires a talent base prepared for what building deeptech actually demands. Cross-disciplinary programmes combining technology, management, and entrepreneurship—supported by adjunct faculty drawn from industry and the professions—must become standard. Undergraduate grants for independent research, institutionalised gap years under the National Education Policy, scholarships for doctoral study at leading global institutions with structured return pathways, and six-to-12-month R&D internships spanning domestic and international laboratories and industry settings will, over time, produce a generation of founders and leaders who arrive at the lab-to-market inflection point considerably better equipped than their predecessors. Similar to capital formation, we also need the same intermediary layer in the talent space—deeptech focussed hiring platforms and recruitment firms staffed with experts who have relevant talent networks. 

SEDEMAC demonstrated what is possible when exceptional founders build with conviction through conditions that required them to construct an ecosystem largely for themselves. India now possesses the policy intent, institutional momentum, and evolving capital architecture to build it deliberately—so that the next team emerging from an Indian academic lab encounters a system designed to carry them forward, and gets them to the finish line in eight years instead of 17. 

(The author is Advisor, Avaana Capital. Views are personal.)