Bharat Innovation Fund: Turbocharging Investment in DeepTech Startups for Doubled Impact

• ByStartupStory     |    August 14, 2023

Bharat Innovation Fund (BIF), a Bengaluru-based early-stage venture capital firm specializing in deeptech startups, is planning to significantly increase its investment in the growing deeptech sector. The move comes as the Indian government introduces policies to support and nurture deeptech startups, aiming to create a conducive environment for their development.

As of May 2023, there are 10,298 DPIIT-recognized startups in the deeptech space, according to the Startup India database. However, despite the increasing numbers, there are no unicorns in this sector yet, and funding for deeptech startups remains a challenge. A NASSCOM report reveals that deeptech startups managed to raise $2.7 billion in 2021 out of the total $37 billion raised by Indian startups that year.

The draft National Deep Tech Startup Policy, recently unveiled by the Indian government, seeks to address the funding challenges faced by deeptech startups. It aims to streamline the funding landscape, improve gestation-to-market timelines, and ensure smoother operations for these innovative ventures.

Against this backdrop, Bharat Innovation Fund plans to expand its investment in deeptech startups. The firm, founded in 2018 with a $100 million thematic fund, has already invested in around 17 deeptech startups, including CreditVidya, Shifu, Setu, Entropik, and Riskcovry.

The current investment size ranges from $1-3 million for initial funding rounds, and BIF is looking to increase this to $5 million for the first cheque. The fund also allocates around $8 million for follow-on funding rounds. With an emphasis on growth and maturity in the deeptech segment, BIF aims to build a manageable portfolio of around 23 startups under its $100 million fund.

According to Ashwin Raguraman, Partner at BIF, three key factors contribute to the increasing prominence of deeptech startups in India. These factors include the effective utilization of artificial intelligence (AI), the availability of high-quality talent with both business and technical acumen, and India’s role as a valuable test market for innovative products.

 “Deeptech entrepreneurs today are building with an early global outlook and this will be a catalysing factor for the entire segment,” says Raguraman.

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