India's 223,000 Startups Face a Harder Question: Can They Own the IP?

India had 223,000 DPIIT-recognized startups as of March, yet only 2,174 of the more than 13,000 patent applications filed by startups have been granted—and many of the rest were abandoned. That gap, argues Padmaja Ruparel, co-founder of the IAN Group and board member of TiE Delhi-NCR, defines India's next startup phase: the count no longer matters; what matters is whether Indian technologies become publicly accountable global enterprises.

Writing in a weekly TiE opinion series for Livemint, Ruparel stresses that most Indian intellectual property is treated as "protection" rather than as an "asset." The distinction, she argues, is becoming existential. Nearly 92% of S&P 500 market capitalization now derives from intangible assets—brands, IP, software and data—up from just 17% in 1975. Global spending on intangible investment has crossed $4.7 trillion a year in advanced economies, overtaking physical infrastructure investment.

Why deeptech changes the funding equation

Deeptech startups—built on breakthroughs in materials, semiconductors, biotech, space, robotics, energy and quantum computing—may need years to move from lab to commercial scale. Ruparel warns that applying software-style growth expectations can trigger premature down-rounds, underinvestment or abandonment of strategically significant technologies.

She points to IBM's plan to deliver a large-scale, fault-tolerant quantum computer by 2029 and to AI infrastructure firm Fundamental, which raised funding while securing deployment through Amazon Web Services. The lesson, she writes: breakthrough technologies attract capital through "clear, measurable technical milestones, not vague promises of future disruption."

The takeaway: patient capital alone is not enough; deeptech demands testing facilities, early customers and institutional support.

What IAN's due diligence keeps finding

Ruparel is candid about failure rates. At IAN, she writes, due diligence repeatedly uncovers IP not assigned to the company, core technology built by consultants who retain ownership, or branding so close to a larger company's that it "could one day wipe the company out." Well-protected IP, by contrast, supports international expansion, licensing and future funding rounds.

IAN's bets include Nayam, Pandorum and Peptris. Peptris's IP aims to compress the drug-discovery cycle from ten years to four or five—a change that, if it holds, would rewrite the economics of pharmaceutical development.

The proof point she cites: IAN's first cheque into Uniphore enabled it to buy an IP asset out of a lab. Uniphore is now valued at over $2.5 billion, with capital from Nvidia and OpenAI—and IAN still holds shares.

The numbers India cannot ignore

India's R&D spending stood at 0.84% of GDP in 2023-24 and is projected to reach 0.90% in 2025-26, with private industry's share climbing from 32.2% to 45.2% in three years. The comparison is stark: China spends about 2.6% of GDP on R&D, the OECD average is roughly 2.7%, the US 3.7%, South Korea 5.1%, and Israel leads at 6.3%.

Two public instruments now target the gap:

• Startup India Fund of Funds 2.0, with a proposed corpus of ₹10,000 crore, targeting deeptech, technology-driven manufacturing and early-growth companies.
• The ₹1 trillion Research, Development and Innovation (RDI) Scheme, offering 12-15 year loans and equity participation to lab-validated technologies—and it has begun disbursing.

A 12-to-15-year horizon is longer than the life of a typical Indian venture fund. That, Ruparel writes, is the point: public capital is absorbing technology risk private capital never could.

SEDEMAC and the IPO as maturity, not exit

SEDEMAC Mechatronics, founded in 2007 in an IIT Bombay laboratory by a professor and his students, listed in March this year—profitable, supplying engine control systems to Tata Motors, Mahindra, Ashok Leyland and TVS. Nineteen years from lab to listing. The offer raised no new capital; every share sold belonged to an existing shareholder. The listing, Ruparel argues, was the moment a university-research company became publicly accountable.

What still blocks the pipeline

Ruparel lists the unfinished work: regulatory approvals dominated by bodies outside India, such as the US FDA; thin corporate research funding beyond the Infosys Prize and Tata Transformation Prize; a missing layer of domestic growth capital that pushes companies toward foreign investors or flipping out of India; and an IPO framework whose Innovator Growth Platform lacks merchant bankers and investors who understand IP-heavy, profit-light companies.

Her closing frame is one of economic sovereignty: who owns the technology, who controls the firm, and where the jobs and manufacturing stay. Whether India's ₹1 trillion in public schemes can crowd in the private institutions to answer those questions will determine if the pipeline runs from lab to listing—or stalls at the patent office.