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Rise of deep-tech: India home to 3,000+ AI, Big Data and blockchain start-ups, says NASSCOM

Rise of deep-tech: India home to 3,000+ AI, Big Data and blockchain start-ups, says NASSCOM

Deep-tech start-ups in India raised $2.7 billion in venture funding in 2021, and now account for over 12 per cent of the country’s overall startup ecosystem, NASSCOM said in a recent study.

Overall, the share of deep-tech start-ups in India’s overall entrepreneurial ecosystem stands at 12 per cent now. (Pic: Reuters) Overall, the share of deep-tech start-ups in India’s overall entrepreneurial ecosystem stands at 12 per cent now. (Pic: Reuters)

India had over 3,000 deep-tech start-ups, dabbling in new-age technologies like Artificial Intelligence, Machine Learning, Internet of Things, Big Data, quantum computing, robotics, etc., at the end of 2021. Despite pandemic blues, roughly 210 of these start-ups were born in 2021 alone, according to a new report by industry body NASSCOM, in partnership with Zinnov. 


Bengaluru accounts for 25-30 per cent of India’s deep-tech start-ups, followed by Delhi-NCR (15-20 per cent) and Mumbai (10-12 per cent). Overall, the share of deep-tech start-ups in India’s overall entrepreneurial ecosystem stands at 12 per cent now.


Much in line with the mood of the start-up ecosystem last year, until the “funding winter” of 2022 came about, India’s deep tech start-ups raised $2.7 billion in venture capital across 319 deals in 2021, clocking a 1.6X growth over the year before. Top funded sectors were supply chain management (SCM) and logistics, healthtech, and BFSI, jointly accounting for 52 per cent of the total capital raised in the year. 

Graphic: Pragati Srivastava
Graphic: Pragati Srivastava

1 in 3 of India’s deep-tech start-ups have applied for patents, while 23 per cent of the funded companies cater directly to consumers (B2C), NASSCOM added. 

“The Indian deep-tech ecosystem today has truly come of age. These start-ups have not only defied the odds with extraordinary innovation and exceptional leadership but are also playing a vital role in creating solutions for sustainability goals – from smart manufacturing to reliable healthcare,” Debjani Ghosh, President, NASSCOM, said in a statement. 

Key stats: Growth & Challenges

India’s deep-tech ecosystem has grown 53 per cent in the last decade, and is now at par with that in developed economies like the US, China, Israel, and Europe. From drone delivery and cold chain management to climate action and clean energy, deep-tech start-ups are making their presence felt across sectors. 


They are also creating thousands of jobs in the new economy. “4,000 people are employed across 14 potential deep-tech unicorns, and is expected to increase by 2X in headcount by 2026,” NASSCOM revealed. “Large deep-tech firms are also giving rise to second-generation entrepreneurs,” it added.


As per NASSCOM estimates, India has 1,900+ AI start-ups, 570+ Big Data & Analytics start-ups, 560+ IoT start-ups, 240+ blockchain start-ups, 210+ augmented reality (AR) and virtual reality (VR)  start-ups, 150+ Web3 start-ups, and 50-60+ start-ups each in cybersecurity, robotics, drones, and 3D printing.


Of the 30+ M&A deals in 2021, 17 per cent pertained to deep-tech start-ups, according to NASSCOM’s findings. 

Photo: Reuters
Photo: Reuters


Besides the organic growth of the ecosystem through the decade, deep-tech start-ups are now being courted by organizations and enterprises as they look to build niche tech capabilities and expand their product portfolio on their path of digital transformation. 


However, despite impressive growth, deep-tech start-ups continue to grapple with challenges, including dearth of good talent, access to seed capital and go-to-market opportunities, missing research guidance, high costs of customer acquisition, and more.  


NASSCOM says “talent and market access” are the biggest challenges for upto 60 per cent of deep-tech founders in India, while 55 per cent of the start-ups seek to engage with academia.


“Deep-tech start-ups have the potential to significantly drive our $5-trillion economy dreams ahead by creating a massive impact across all levels of the India story,” Pari Natarajan, CEO, Zinnov stated. 

Also Read: Large-scale cloud adoption can add 14 mn jobs, $380 bn to GDP by 2026: NASSCOM

Published on: Aug 24, 2022, 12:06 PM IST
Posted by: Akashdeep Baruah, Aug 24, 2022, 11:49 AM IST