Indian start-ups prefer quick wins over deep tech innovation
The Union Commerce Minister Piyush Goyal’s recent criticism of Indian start-ups and their lack of focus on deep tech has sparked a flurry of debate in the ecosystem. However, data also show that the Indian start-up activity is merely following sectors/areas that are more lucrative and have the potential to attract funding.
The share of venture capital (VC) funding for those innovating on deep tech business models has been on the decline in the last few years, per data from research firm Venture Intelligence.
While 11 per cent share of VC deal counts and 13 per cent of the VC investment value was held by deep tech firms in calendar year 2023, this dipped to 9 per cent and 6 per cent of count and value, respectively, in 2024. In the first three months of 2025, just 9 per cent of total amount invested by VCs in start-ups went to deep tech ventures.
Further, an analysis of India’s current 117 unicorns shows that only about four — Ather Energy, Fractal, Netradyne and Krutrim AI — may qualify to be considered as deep tech ventures.
Start-up founders and investors note that the Indian start-up ecosystem is today at a stage where China was a decade ago. Chinese entrepreneurs, too, started off with a consumer tech focus and then matured to innovate in deep tech, they said.
“Ather started off around 2015 and is today a unicorn. It took them 10 years to get there. It is a matter of time we will see more of today’s early-stage deep tech ventures grow into unicorns,” Vishesh Rajaram, co-founder of deep tech VC firm, Speciale Invest, said. He noted a need to have more VC firms focused on supporting R&D oriented deep tech ventures.
Lopsided growth
Similarly, analysis of data from business intelligence platform YNOS Venture Engine shows that of the 1,62,134 start-ups currently recognised by Startup India initiative, just about 15,597 have raised any sort of equity funding. As of January 31, 2025, over 1.61 lakh start-ups had been officially recognised by the Department for Promotion of Industry and Internal Trade (DPIIT), generating more than 17.69 lakh direct jobs nationwide, data show.
However, a significant concentration of this entrepreneurial activity is clustered in just five States — Maharashtra, Karnataka, Delhi, Uttar Pradesh, and Gujarat — which together account for 56.2 per cent of all recognised start-ups and 58 per cent of the jobs created through them.
In terms of employment, Maharashtra again tops the list with over 3.17 lakh jobs, followed by Delhi (1.96 lakh), Karnataka (1.95 lakh), Gujarat (1.58 lakh) and Uttar Pradesh (1.55 lakh). These figures underscore the lopsided nature of India’s start-up growth, with metro States dominating both in numbers and impact.
As India’s start-up story continues to unfold, the next challenge lies not just in encouraging more start-ups — but in ensuring that the benefits of this growth is across sectors and it reaches every corner of the country.
