Roti, Kapda And Rocket

For a brief period in 2021, almost every country in the world was trying to buy the same thing.

Vaccines.

Money mattered, of course. But money alone was not enough. There had to be science that could develop a vaccine, facilities that could manufacture it, supply chains that could support it, and the ability to produce at a scale measured not in thousands, but billions.

India happened to have much of that machinery.

Covishield was developed from Oxford-AstraZeneca technology, but manufactured domestically at an enormous scale by the Serum Institute of India. Covaxin was developed in India by Bharat Biotech in collaboration with ICMR-NIV. And behind both sat something less visible but arguably more consequential: decades of accumulated scientific and vaccine-manufacturing capability.

Amongst many others, COVID taught us a hard lesson that buying a technology is not the same as being able to develop, manufacture and scale it yourself. Self-reliance has always been a national ambition; in the world ahead, it is becoming a strategic necessity.

This is hardly a twenty-first-century lesson. The technologies that conferred advantage have changed with every era: steel, electricity, aviation, nuclear power, computing. But the underlying equation has remained remarkably consistent. Countries that can build the defining technologies of their time gain leverage. Countries that can only buy them remain dependent.

What changes is which technologies define the era.

Right now, that list is being rewritten unusually quickly. AI may dominate the conversation, but the shift is much broader: semiconductors and computing infrastructure, space and autonomous systems, advanced manufacturing and materials, new energy, quantum and defence technology. Together, these make up what is often called deep tech.

These are no longer treated simply as promising new industries. They underpin capabilities countries increasingly want to control for themselves: how they defend, compute, manufacture, generate energy and reach space. As supply chains grow less certain and technological dependence more costly, governments are putting policy, procurement and capital behind building that capability at home.

Deep tech, increasingly, is not just an investment category. It is becoming part of how countries think about capability itself.

Deep tech is unusually difficult to build

Governments can set the ambition and put money behind it. But capability is ultimately built by companies, many of them startups, working at the frontier of what is technically possible. And there is a catch.

If these technologies were easy to build, they probably wouldn’t be deep tech in the first place.

The difficulty is almost built into the category. The science may still be evolving, the engineering unsettled, manufacturing unproven at scale, and the market years away from knowing exactly what it wants. There is no well-worn playbook because, quite often, the company is writing it as it goes.

For a conventional startup, the journey is difficult but relatively familiar. Build a product, put it in front of customers, iterate, find product-market fit and, if things go well, scale.

A deep-tech startup has more to prove before it earns the privilege of worrying about product-market fit. The science has to work. Then the engineering. The prototype has to survive outside the lab, clear validation and certification, and eventually be manufactured at viable economics. Only then do the familiar questions fully arrive: will someone buy it, and can it scale?

Deep tech, in other words, has to repeatedly prove the technology on its way to proving the business. And at every one of those stages, a company can run out of time, money or both.

That is the Valley of Death. It is hardly unique to deep tech, but here it takes a different shape. It starts earlier, lasts longer, and the risks change as a company moves through it. And, perhaps most interestingly for us, the terrain changes depending on where in the world you are trying to cross it.

A quick geography of the Valley

The Valley exists everywhere, but its shape is not universal. The US has perhaps the most complete system around it, from research and specialist capital to government demand and growth markets. China brings enormous industrial and manufacturing depth. Europe has exceptional science but a more difficult scale-up environment. India is younger, with strong engineering talent but much of the machinery around validation, first customers and patient growth capital still being built.

In other words, countries are not trying to solve the same problem at the same point in the journey.

So, how is India’s Valley looking?

By now, you would have to be trying rather hard not to notice Indian deep tech. For many of us growing up, space meant NASA; for a child in India today, ISRO is just as naturally part of that imagination. Semiconductors have entered mainstream conversation, private companies are building rockets and defence systems, and technologies that once felt rather distant are increasingly being built closer to home.

The numbers suggest something more substantial is underway. More than 85% of the $11.4 billion invested in Indian deep tech since 2015 has arrived in just the past six years, with 2025 marking a record year. At the same time, the ₹1 lakh crore RDI Scheme, specialist private capital and a growing set of commercially validated companies are beginning to change the machinery around them.

But growth is the easy part to see. The harder question is what all of this has actually done to India’s Valley of Death. Where does Indian technology still struggle on its way from invention to commercial scale, where has the crossing become easier, and how far have we really moved?

The difficult middle is beginning to change

The good news is that this is not a static picture. Some of the hardest parts of the crossing are beginning to look different.

First, markets that were once largely the domain of the state are opening to private enterprise. Space is the clearest example. Private companies can now build launch vehicles, satellites and space infrastructure in areas once largely occupied by ISRO, while IN-SPACe was created specifically to enable and regulate private participation. Defence is moving in a similar direction, bringing startups and private companies deeper into technology development and procurement.

Second, the state is moving closer to technology. In defence and space, the government is rarely only the policymaker. It can also provide the infrastructure to develop, test and validate technology, and eventually become the customer. iDEX alone had signed 551 design and development contracts by March 2026, while IN-SPACe and ISRO are opening similar pathways in space.

Third, the route to a first customer is becoming clearer. This matters because a technology can work beautifully and still have no commercial proof until somebody agrees to use it. The iDEX funnel offers a useful glimpse of that progression: from hundreds of development contracts to 58 prototypes cleared for procurement and 45 signed orders worth ₹2,326 crore.

Fourth, capital is beginning to follow companies further across. Deep tech needs larger cheques precisely while uncertainty remains high. The RDI Scheme is explicitly targeting that gap, with ₹2,192 crore of support approved for its first 22 projects by July 2026, while specialist private funds are beginning to write larger cheques.

None of this means the difficult middle has disappeared. Moving from technical proof to commercial scale remains a demanding journey. What has changed is the architecture around it: more pathways to test and validate technology, clearer routes to first customers, and a broader pool of capital participating as companies move towards scale.

Crossing the Valley is not the finish line

Getting a technology through validation and into deployment is an enormous achievement. It also creates the next problem almost immediately: scale. Factories have to be built, supply chains secured, working capital financed and global customers won. By now the technology is far less risky, but the capital it needs has only grown.

For those of us in Indian private markets, there is something familiar about this moment. We have watched successive industries take shape around us, and capital has been part of that journey: from software and financial services to consumer businesses, manufacturing and, more recently, the AI ecosystem. Each cycle has asked investors to understand a new kind of company, underwrite a different kind of risk and provide the capital required for the next stage of growth. Deep tech asks us to do that again, only this time the job is harder: we are being asked to underwrite the technology itself, and stay with it as it becomes an industry.

That changes what good capital looks like. That does not mean lowering the investment bar for deep tech. If anything, it raises it. It needs more patience, because validation and procurement don’t move on software timelines. It needs harder diligence, because investors must understand the IP, the manufacturing economics and how much technical risk genuinely remains. It needs larger follow-on cheques, because companies that prove their technology usually need more money, not less. And it needs credible paths to liquidity, because patient capital cannot mean permanent capital. That last gap is already visible: in IVCA’s survey of deep-tech funds, 62% named exit visibility as their biggest challenge, and more than half of exits so far have been secondary sales rather than IPOs.

Then there is the question of where that capital comes from. India now has far deeper pools of domestic wealth, and a private-markets ecosystem able to allocate them. As more strategic technologies are built here, deeper pools of Indian capital that understand them and can stay with them become increasingly important: family offices, AIFs, institutions, corporates and, eventually, public markets, forming a continuum from technical proof to global scale.

We are funding companies, but we are also helping build the kind of investment support deep tech in India needs to grow. That means understanding and pricing risk carefully, and backing companies that have shown they are ready to scale

What makes it across will shape what India becomes

The significance of a successful crossing goes well beyond the company that makes it. Deep-tech ecosystems are cumulative. A rocket company does not only build a rocket; it creates engineers who have solved propulsion problems, suppliers capable of manufacturing to new tolerances, testing infrastructure that can be used again, customers who better understand what domestic technology can do, and investors who have learnt how to underwrite the risk. The second company does not start where the first one did.

That is how technological capability gets built. Industries are rarely the product of a single breakthrough; they emerge as knowledge, infrastructure, supply chains, capital and institutions accumulate across successive generations of companies. Each one makes some part of the next journey cheaper, faster or simply possible.

India’s vaccine industry is a useful reminder. The capability that became so visible during COVID had been accumulating quietly for decades. Scientific institutions had been built, manufacturing expertise developed, supply chains established and people trained. When the moment came, India did not merely have access to vaccine technology; it had the scientific and industrial machinery to develop and manufacture vaccines at extraordinary scale.

Deep tech asks India to build that kind of accumulated capability across several technologies at once. And there is a powerful economic consequence to getting this right. The value created is not confined to the enterprise value of the companies that succeed. It sits in IP that remains in the country, specialised manufacturing capacity, a deeper supplier base, technical talent that moves through the ecosystem, domestic pools of informed capital and, eventually, entirely new industries built around capabilities that did not previously exist here.

Not every company will make it across the Valley, nor should it. The number of startups funded or rupees invested matters less than what each success leaves behind: talent, suppliers, facilities, IP and experience that make the next company easier to build

That is how a Valley becomes an ecosystem.

Jai Hind 🇮🇳

Chief Brand & Investor Relations Officer

Sneha Dadrwal

Frequently Asked Questions

Q: What is deep tech?

A: Deep tech covers technologies built on hard science and engineering. Examples include semiconductors, space systems, advanced manufacturing, new energy, quantum and defence technology. These companies often have to prove the science and the engineering before they can prove the business.

Q: What is the Valley of Death in deep tech?

A: It is the stretch between a working technology and a viable business, where many companies run out of time or money. In deep tech it starts earlier and lasts longer. The risks also shift as a company moves from lab proof to validation, certification and manufacturing.

Q: How is India helping deep tech startups cross the Valley of Death?

A: India has opened sectors like space and defence to private companies. Bodies such as IN-SPACe and ISRO help startups test and validate their technology. iDEX creates a path to first customers, with 45 signed orders worth ₹2,326 crore. The ₹1 lakh crore RDI Scheme targets the funding gap in the middle stages.

Q: How much has been invested in Indian deep tech?

A: About $11.4 billion has been invested in Indian deep tech since 2015. More than 85% of it arrived in the past six years, and 2025 was a record year.

Q: What kind of capital does deep tech need?

A: Deep tech needs patient capital, harder diligence on IP and manufacturing economics, larger follow-on cheques and clear paths to liquidity. Exits remain a challenge. In one industry survey, 62% of deep tech funds named exit visibility as their biggest concern.

Sources

• Business Standard: IVCA deep-tech funding report
• Press Information Bureau: RDI Scheme and Deep-Tech Fund of Funds
• Machinist: iDEX contracts and procurement, March 2026
• Policy Circle: RDI Fund approvals, July 2026
• CXOToday: IVCA Bharat DeepTech Report 2026
• CyberPeace: exit visibility and secondary exits