Indian Deeptech Draws Pre-Seed Capital as VC Timelines Shift

Indian deeptech startups are attracting venture capital from the pre-seed stage onward, a shift investors say marks a break from years when the sector's long gestation periods scared off early-stage funds. Three investors — an incubator, an early-stage VC and a late-stage investor — laid out the change at a panel discussion at TechSparks 2026, focusing on artificial intelligence and deeptech.

The themes driving the shift are concrete: technological sovereignty, import substitution, AI infrastructure and advanced manufacturing, according to the panellists. India's growing push to build indigenous technology capabilities is letting startups serve domestic requirements while building products for global markets.

Why did deeptech used to scare investors?

Priyanka Agarwal Chopra, Managing Partner and CEO of IIMA Ventures, said deeptech had traditionally been a challenging segment because of its high risks and longer gestation periods, which often did not align with conventional venture capital timelines.

"When we started, our founding vision was to address gaps in India's innovation and entrepreneurship ecosystem, particularly in markets and sectors where private sector capital was not available," she said.

IIMA Ventures was among the early investors in India's deeptech ecosystem, backing companies in areas then categorised as high technology. Chopra identified technological sovereignty and import substitution as the two major themes currently driving deeptech innovation in India. She added that while early-stage deeptech investing was once a relatively isolated proposition, more funds are now willing to write cheques even at the pre-seed stage.

Where are VCs placing their bets?

Anaina Malik, Partner at VU Venture Partners, said AI infrastructure would be an important investment opportunity as India expands its AI application ecosystem, arguing that infrastructure development deserves attention alongside application-led innovation.

Malik also named agriculture and advanced manufacturing as underserved sectors with considerable potential for technological disruption. Her firm is looking at startups addressing India's domestic requirements as well as companies building for international markets. In her view, the boundaries between domestic and global markets are dissolving, with international capital showing greater interest in opportunities emerging from India.

Sandeep Sinha, Co-founder and Co-CEO of Oister Global, offered the late-stage lens. He said India's deeptech ecosystem has matured considerably, with several companies that began their journeys eight to 10 years ago now reaching commercial readiness. Many of these ventures have already retired significant technology and R&D risks and now generate revenues from both domestic and international markets.

Sinha said deeptech companies are increasingly demonstrating value creation through revenue growth, margin expansion and market expansion. For investors evaluating the sector, the emergence of commercially viable businesses with greater revenue visibility is an important development.

What is 'chaos by design'?

Sinha acknowledged the funding ecosystem remains somewhat fragmented, but described current activity as 'chaos by design'. The increased movement of capital and investors over the past 18-24 months has brought deeptech into sharper focus, he said.

The panellists also stressed founder capabilities as decisive in investment decisions, particularly at early stages when financial and operating data are limited.

Chopra said early-stage investors weigh four parameters:

• founder depth
• founder-problem fit
• the entrepreneur's unique insight
• the market opportunity

Sinha stressed that founders need to build predictable businesses and diversify their customer base rather than depend excessively on a single customer, however important that customer may be.

How big are the cheques?

On deal sizes, Malik said VU Venture Partners' initial cheque sizes remain between $250,000 and $1 million. The firm has, however, increased its follow-on investments, choosing to stay invested longer and support founders through different stages of growth.

She added that evaluating AI startups has become harder because of the large number of companies labelling themselves AI businesses. The firm now places greater emphasis on understanding the underlying technology through deeper due diligence.

Is the money only chasing AI and deeptech?

Not according to Chopra. She cautioned entrepreneurs against assuming opportunities in other sectors have diminished, noting that consumer businesses, fintech and retail continue to offer substantial opportunities on the back of strong domestic demand.

India's startup ecosystem has room for multiple business models and sectors, she said, encouraging founders to pursue opportunities they are genuinely passionate about.

With deeptech ventures now showing revenue visibility and funds willing to enter at pre-seed, the panel's message was that India's capital stack is finally aligning with the sector's longer timelines.