India’s Capital Rewards Speed. Invention Demands Patience

Where the Money Now Gets Stuck

Som Pal Choudhury hears the idea-problem diagnosis often, and he does not buy it. As co-founder and partner at Bharat Innovation Fund, an early-stage deep-tech investor, he reads the me-too startups as the background hum of an ecosystem expanding fast, not as a failure of imagination. “I would disagree with the notion that India has an idea problem,” he says. The jewels, he allows, are simply harder to spot.

What has changed, in his telling, is where the wall now stands. Early money has started to flow, he says, as micro-VCs and the government’s fund-of-funds back deep tech and sovereign technology. The shortage has moved upstream. Late-stage and growth capital for these companies is still thin, the kind of large cheque that carries a proven technology to a dominant position in a global market.

Part of that gap is structural. Most venture funds run on fixed lifecycles and answer to backers who want their money returned inside a set window. A deep-tech company can need 8 to 12 years before a commercial outcome comes into view. The arithmetic of the average fund was never built for that wait, so capital drifts toward businesses that show traction quickly.

Choudhury points to a second drag that rarely makes the headlines, the way large Indian companies buy. Too many still treat a startup as a contractor rather than a product. He calls it the DITFOME trap, short for Do It For Me. “Instead of buying a startup’s scalable software or platform, they try to treat the startup as a bespoke IT vendor,” he says, a habit that buries breakthrough firms in endless proofs-of-concept and custom work and quietly smothers their ability to scale.

The venture industry owns part of this too. Asked whether investors share the blame, Bhatia does not dodge. “Yes, and we’ll be the first to admit it,” he says. “We’ve gotten really good at spotting category winners in existing categories, but not as good at backing category creators before the category even exists.”

Choudhury sees the picture already turning. Forward-thinking funds are climbing the risk curve toward IP-led bets, he says, and his own portfolio is the evidence he reaches for. He cites Detect Technologies in industrial AI, Algorithmic Biologics in molecular computing, and Zumutor, whose NK-cell cancer therapy is in human trials. Across the fund’s companies, he says, founders have filed more than 100 patents worldwide.

The aim, Nandagopal argues, is not to clone those frontier models. “The real opportunity is to ask what India can uniquely build because of its scale, complexity, multilingual population, healthcare gaps, education gaps, manufacturing base and services depth,” he says.

The State Is Funding the Bets Markets Won’t

This is the space the state has walked into. On 1 July 2025 the Union Cabinet approved a ₹1 lakh crore Research, Development and Innovation Fund, about $12 billion, to push patient money into sunrise sectors. On 14 February 2026 it cleared a second Startup India Fund of Funds, ₹10,000 crore or roughly $1.1 billion, pointed squarely at deep tech and advanced manufacturing. It also stretched the startup classification for deep-tech firms from 10 to 20 years, a quiet concession that invention runs on a slower clock.

The money has begun to move. On 13 May 2026 the Technology Development Board released the first tranche of the RDI Fund to five deep-tech startups, among them the satellite maker Dhruva Space. India’s hardest technology bets, in short, got their first cheques from the government rather than the market.

Choudhury reads these moves as proof that the early-stage problem is getting solved, not that the work is finished. The harder gaps sit higher up. Growth-stage institutional capital for deep tech is still in its infancy. And the playbook for scaling a B2B deep-tech company worldwide, at speed, barely exists in India yet.

Other signals point the same way. Specialist deep-tech funds are forming. Founders are coming home from global technology firms with ambitions beyond local adaptation. The market itself has grown choosier, and growth without defensibility no longer dazzles the way it did in 2021.

Nandagopal frames the test plainly. “The first wave proved that India could build large digital businesses,” he says. “The next wave has to prove that India can build original technology companies, not just distribution-led companies.”

The stakes reach well past valuations. Countries that own foundational technologies tend to set the standards and capture the value across whole industries. Those that do not import both. Bhatia does not soften it.