India’s deeptech story has never looked more promising from the outside. 7,500 startups. $11 billion raised. Founders building across AI, semiconductors, climate, space, and robotics with a conviction that didn’t exist five years ago. We’ve stopped debating whether serious deeptech can be built in India and started asking how fast we can scale it globally.
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But after years of working closely with deeptech founders, investors, and institutions, I keep returning to one question the optimistic narrative tends to skip. Why do so many genuinely strong startups disappear quietly between seed and Series A?
The Number We Should Be Talking About
The headline figures look encouraging. Deeptech funding grew 37%, from $0.9 billion in 2023 to $2.3 billion in 2025. The pipeline looks full. Everyone seems optimistic.
Until you look closer. Out of 1,700+ funded deeptech startups, only 354 reach Series A. Only 200 make it to Series B. 85% never cross the threshold within five years. This is not natural market attrition. This is a structural failure embedded in how deeptech gets funded in India, and it is costing us companies and technologies we cannot get back.
I think of it as a bridge with a missing span. Seed funding lays the foundation. Late stage capital waits on the other side for proven scale. Series A is supposed to connect the two. Instead it has become the place where India’s most promising deeptech companies quietly stall.
A Timeline Problem We Haven’t Honestly Confronted
Deeptech companies need time. Five to ten years before reaching the kind of scale that makes a growth stage investor comfortable. That is not poor execution. That is the reality of building technology that changes how the physical world works.
Most VC funds operate on seven to eight year cycles. By the time a founder arrives at Series A, the investor across the table wants revenue, traction, and a model they can project. This creates a genuine paradox. The startups doing exactly what rigorous deeptech demands, moving carefully, validating thoroughly, building for the long term, often look least attractive at precisely the stage when they most need capital.
Only 15 to 25% of seed funded deeptech startups ever secure Series A. That number hasn’t shifted because the capital structure hasn’t changed. It won’t change until we build funding instruments designed for deeptech timelines rather than forcing deeptech companies into frameworks built for software businesses.
The Valley Nobody Funds
India has made real progress at the early stage. Grants, incubators, and government programs have strengthened the pipeline from idea to prototype.
The problem begins at TRL 4 and deepens through TRL 6. This is where prototypes must become scalable, commercially viable products. Where the questions shift from “does this work in a lab” to “can we produce it reliably and sell it profitably.” This phase demands market insight, pricing strategy, distribution infrastructure, and customer development alongside technical capability.
Grants stop at TRL 1 to 3. Venture capital wants TRL 7 and above. The critical middle stage, where the hardest and most capital intensive work happens, is chronically underfunded. No single actor designed this gap. But it is real, and talented founders with genuinely important technology fall into it every day.
What Log9 Actually Tells Us
Log9 Materials raised $50 to 60 million. They built credible, differentiated technology in fast charging battery systems. They moved from research into real pilots and commercial deployments with actual customers. By every metric that matters at the growth stage, they were executing.
Then the manufacturing scale changed the nature of the business entirely.
Costs climbed faster than the capital structure could absorb. Infrastructure demands expanded. The capital needed to navigate that transition was larger, longer horizon, and more patient than what was available at the right moment.
The technology did not fail. The capital architecture did.
This pattern repeats quietly across the ecosystem. Early funding carries startups to validation. Then production begins. Burn changes character. Fixed costs arrive. The capital required no longer resembles seed investment. When follow on funding isn’t structured for that reality, the gap opens fast. The pressure doesn’t build at the idea stage. It builds at the exact moment technology must become a business.
Three Things That Would Actually Change This
Based on what I’ve observed working within this ecosystem, three shifts would create real and durable change.
Patient capital needs to become a genuine asset class, not a conference talking point. Deeptech dedicated funds with 12 to 15 year horizons. Corporate investors with long term strategic intent. Government capital that follows startups through commercialization rather than stopping at proof of concept.
Investment evaluation frameworks need to evolve. Revenue at year three means something fundamentally different for a battery company than a SaaS business. IP depth, research defensibility, technology differentiation, and long term market credibility need to become standard inputs in deeptech investment decisions, not afterthoughts viewed through a standard venture lens.
Academia, industry, and capital need to integrate far more intentionally. Many founders reach Series A having never had a serious commercial conversation, without a distribution strategy, and with IP structures not designed for commercialization. This is not a founder failure. It is an ecosystem design failure that structured industry partnerships and commercial fellowship tracks within academic institutions could meaningfully address.
The Opportunity Is Real. So is Accountability.
India’s engineering talent is deep. The policy environment is improving. And India’s own challenges in energy, healthcare, and manufacturing represent an indigenous market of enormous scale for exactly the technologies our founders are building. Solutions designed for India’s constraints tend to be unusually robust and that robustness has global value.
But realizing that potential requires honesty about what is broken. Celebrating headline funding numbers while quietly accepting an 85% Series A failure rate is not optimism. It is a choice to avoid accountability for a problem that is costing us dearly.
The Startups in That Gap Are the Future We Keep Describing
Deeptech will define the next decade. The companies working today on climate technology, advanced materials, healthcare innovation, and semiconductor design are building India’s future industrial capability. The question is whether we build the ecosystem to carry them all the way through.
That requires investors to rethink time horizons. Policymakers to stay engaged past the prototype. Corporates to show up as genuine partners. And all of us to stop treating the Series A gap as an acceptable feature of the landscape.
The startups caught in that gap right now are not a statistic. They are the future we keep saying we want to build.
It is time we funded it like we mean it.
The article has been written by Ashutosh Srivastava, VP Investments in SanchiConnect
