India’s deeptech funding hits record high as capital shifts to frontier technologies: Report
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India’s deeptech ecosystem recorded its strongest funding year on record in 2025, even as overall startup funding declined, according to the IVCA Bharat DeepTech Report 2026. Deeptech companies raised $2.96 billion across 189 deals in 2025, nearly three times the number of deals recorded in 2024. The momentum has continued into 2026, with $997 million raised across 103 deals as of July 16.
The report, released by the Indian Venture and Alternate Capital Association (IVCA), said India’s deeptech sector has attracted $11.4 billion across 957 PE-VC deals between 2015 and 2026 year-to-date. The report draws on data from IVCA-Venture Intelligence and a survey of 100 deeptech funds.
The funding growth comes as deeptech becomes a larger part of the global venture capital market. Globally, deeptech accounted for 36% of VC funding in 2025, up from 14% in 2016. Global deeptech funding stood at $177 billion across 2,650 rounds in 2025, up 82% year-on-year.
India, however, remains significantly smaller than the leading markets. The US attracted $136 billion in deeptech VC funding in 2025, compared with $11 billion in China, $7.4 billion in the UK, $3 billion in Germany and $2.9 billion in India. The report puts the US-India funding gap at around 46 times.
Despite the gap, deeptech’s share of India’s domestic VC-PE activity has increased from 4% in 2016 to 15% in 2025. The report said this shift is significant because it came even as overall Indian startup funding fell 17% in 2025.
AI, EVs lead funding
AI and generative AI attracted the largest amount of deeptech funding in India, at $2.88 billion across 96 deals. Enterprise DeepTech/SaaS followed with $1.57 billion, while EV and battery technologies received $1.48 billion across 35 deals.
AI and EV/battery technologies together accounted for around $4.3 billion, or nearly 40% of cumulative deeptech funding. Semiconductors and SpaceTech are also emerging as important areas, with cumulative funding of $620 million and $658 million, respectively.
The report noted that EV and battery companies attracted the largest average deal size at around $42 million, while AI/GenAI averaged about $30 million per deal.
The funding pipeline remains heavily concentrated in later stages. Series C and later rounds accounted for just 7% of deals but 35% of dollars invested. The average deal size rises from $6.6 million at Series A to $54.3 million at Series C+, highlighting the capital required to take deeptech businesses from development to commercial scale.
Policy support to shape next phase
The report also points to increasing government support for the sector, including the ₹1 lakh crore Research, Development and Innovation (RDI) Fund, the India Semiconductor Mission 2.0 and other government-backed capital programmes.
Rajat Tandon, President, IVCA, said, “Building globally competitive DeepTech enterprises therefore requires more than entrepreneurial ambition. It requires patient capital, strong research institutions, enabling policy, industry participation and investors willing to support innovation over longer horizons.”
He added, “The strength of India’s DeepTech ecosystem will depend on how effectively entrepreneurs, investors, limited partners, research and academic institutions, corporates and government work together.”
The report identifies the Series B/C funding gap and limited exit visibility as key constraints for the ecosystem. It also notes that 55% of deeptech funds operate with seven-to-10-year horizons, while deeptech companies can have gestation periods of seven to 12 years.
Looking ahead, the report said India’s opportunity lies in building an ecosystem that can take technologies from research to commercialisation and scale. “The opportunity before India is larger than any single fund, institution, programme or stakeholder,” Tandon said. “It is about building an ecosystem capable of taking scientific and technological innovation from discovery to commercialisation, from ambition to scale, and ultimately, from lab to leadership.”