Startup News Magazine

The Future of Deep-Tech in India

Authored Article by Kunal Kapoor (Vice President - Client Engagement | Merkle Sokrati)

India is a growing hub of ingenious deep-tech companies with huge potential to develop products and solutions for themselves and the globe.

Deep-tech, or deep tech start-ups, are companies that work with new technologies such as artificial intelligence (AI), robotics, quantum, blockchain, the Internet of Things (IoT), drones, and augmented reality (AR).

Current Situation 

Of the country’s more than 25,000 technology platforms, only 3,000 are related to deep-tech, which is only 12 percent.

Countries such as China and the US prioritize their funding for the deep-tech start-up ecosystem as the sector promotes their country’s innovation.

While deep-tech companies make up a small fraction of start-ups, they have a significant impact because they tackle big problems, and their work is futuristic and practical.

Key Sectors 

Sectors such as healthcare, BFSI, defence, space and education are using deep-tech to bring innovative solutions to their clients and their own operations, such as automation and cyber security.

Many Indian start-ups are using technologies like drones, robotics and artificial intelligence to improve defence operations. Top adopters include a third of deep-tech start-ups in the business technology and BFSI sectors.

BFSI start-ups are using technologies like big data and analytics along with blockchain for accurate data valuation, data security, transaction immutability and transparency.

Healthcare technology start-ups are moving towards personalized and remote healthcare using smart clothing, remote screening and AI diagnosis.

In addition to healthcare and banking, we are witnessing deep tech in new industries such as agricultural technology, environmental technology, aerospace, shipping and defence, and life sciences.


Funding is one challenge where less than 20% of start-ups have received funding; in deep-tech start-ups, the number is lower. In fact, we have seen both low utilization of government funds and a need for more domestic capital for such start-ups.

Talent and market access, research leads, deep technical knowledge of investors, customer acquisition, and talent costs are the main challenges they face.

Next Steps 

The future of deep-tech looks very bright. Deep-tech start-ups are making their presence felt in various sectors, and large deep tech companies are creating a new class of entrepreneurs. For India to become developed in the coming 20 years, it must build world-class deep-tech in critical sectors.

In addition to the organic growth of the ecosystem, deep-tech start-ups must now adopt organizations and enterprises as they seek to create niche technologies and expand their product portfolio through digital transformation.

To gain access to niche technology and high-quality talent, major companies are buying several deep-tech start-ups in India, indicating strong demand for start-ups focused on disruptive technology that can solve complex global problems.

Recently the fight against the pandemic, increased awareness and urgency to address the issue of global warming, and pathbreaking work being done in fields like biotechnology, space technology, electronic mobility etc., helped recognize the potential of deep-tech to solve big problems. It has also led governments, corporations and venture capital firms to focus on investing in deep-tech at an unprecedented rate.