Eight U.S. and Indian enterprise capital and personal fairness companies — together with storied traders Accel, Blume Ventures, Celesta Capital, and Premji Make investments — have shaped an uncommon coalition to again India’s deep tech startups, pledging greater than $1 billion over the following decade to strengthen U.S.-India tech ties.
The alliance addresses longstanding funding issues. In April, Indian Commerce Minister Piyush Goyal drew criticism after slamming domestic startups for specializing in meals supply as an alternative of innovation, contrasting them with Chinese language companies in a presentation titled “India vs. China: The Startup Actuality Test.” A number of traders and founders countered that India lacks capital for deep tech ventures and mentioned Goyal’s feedback overlooked the determination of founders constructing for the native market. The brand new alliance seems to deal with these issues, aiming to channel long-term personal capital into deep tech ventures that many founders say have struggled to safe funding in India.
The transfer stands out as a result of traders sometimes compete for offers moderately than formally band collectively below a named alliance with binding pledges. Whereas VCs typically co-invest on a deal-by-deal foundation, most cross-border collaboration happens informally via particular person fund methods, moderately than via coordinated capital blocs.
Referred to as the India Deep Tech Funding Alliance, the group brings collectively Celesta Capital, Accel, Blume Ventures, Gaja Capital, Ideaspring Capital, Premji Make investments, Tenacity Ventures, and Enterprise Catalysts, the companies mentioned in a joint assertion on Tuesday. The launch follows the Indian authorities’s approval of a ₹1 trillion (roughly $11 billion) Analysis, Improvement, and Innovation (RDI) scheme, introduced within the nationwide finances earlier this 12 months to spice up deep tech R&D.
Underneath the alliance, every member will commit personal capital over a 5- to 10-year interval to Indian-domiciled deep tech startups, the companies mentioned. For now, there are comparatively few such corporations, as a lot of India’s best-known deep tech ventures with Indian founders are included within the U.S. However New Delhi has made native incorporation a requirement for incentives below its new RDI scheme, which the alliance members purpose to leverage.
Along with funding, the members will provide mentorship and community entry. The companies additionally plan to make the most of the alliance to assist their portfolio corporations increase into the Indian market.
“That is according to the strategic pursuits of each India and the U.S. on the governmental degree, specializing in vital and rising applied sciences,” mentioned Celesta Capital managing accomplice Arun Kumar, who would be the inaugural chair of the alliance, in an interview.
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Nonetheless, the geopolitical backdrop is sophisticated. In February, President Donald Trump and Prime Minister Narendra Modi launched the TRUST (Remodeling the Relationship Using Strategic Know-how) initiative to deepen U.S.–India tech ties. However relations quickly confirmed pressure, as Trump imposed a 50% tariff on Indian goods final month over New Delhi’s continued purchases of Russian oil, a transfer analysts say has put the two leaders on opposite sides of a widening commerce and geopolitical rift.
Regardless of these tensions, the alliance — however the geopolitical rift between the 2 leaders — is betting on India as a hub for startups growing foundational applied sciences reminiscent of AI, semiconductors, house, quantum, robotics, biotech, power, and local weather tech.
“We discover India as a very fascinating market, not only for the alternatives that exist for brand new corporations that get began in India, but in addition for corporations within the U.S. which are in search of to increase into the Indian market,” Sriram Vishwanathan, founding managing accomplice at Celesta Capital, instructed TechCrunch.
Celesta Capital — an early backer of Indian startups reminiscent of space-tech enterprise Agnikul, drone maker IdeaForge, and AI-driven most cancers diagnostics agency OneCell Diagnostics — spearheaded the trouble after discussions with trade stakeholders and the Indian authorities.
“We have now put this factor collectively to truly energize the ecosystem and convey like-minded traders collectively,” Vishwanathan mentioned.
The alliance will concentrate on early-stage startups — from seed to Sequence B — whereas steering away from late-stage investments, Vishwanathan famous. He additionally acknowledged that the billion-dollar-plus dedication is just the start, as “any lengthy journey begins with step one.”
“You might anticipate extra companies to hitch this alliance, each monetary VC companies and personal fairness companies,” he mentioned. “You must also anticipate corporates to hitch who’ve fairly important funding packages.”
Whereas the alliance doesn’t set its personal eligibility standards for brand new members, Vishwanathan mentioned members should meet the Indian authorities’s circumstances below the RDI scheme — together with investing in “sunrise” sectors, backing India-domiciled startups, and securing native regulatory approvals.
“The alliance is only a platform for participating with the federal government,” he instructed TechCrunch.
As a bunch, the traders within the alliance plan to interact with the Indian authorities on coverage and incentives to advance personal trade’s pursuits and act as a unified voice, Vishwanathan mentioned.
Prior to now, regulatory adjustments rolled out with out trade enter have led to turmoil in India. Some such strikes have drawn intense criticism from U.S. traders and had been subsequently withdrawn following widespread outrage.
The alliance’s members will share data voluntarily and coordinate on pipeline improvement, due diligence and co-investment alternatives, the companies mentioned.
An advisory committee, comprising representatives from Accel, Premji Make investments, and Enterprise Catalysts, among the many early members, will assist set up shared goals and guarantee coordination whereas preserving the independence of every fund.
Kumar acknowledged that whereas he’s the inaugural chair, the alliance’s management will rotate because it strikes ahead.
The alliance may show a double-edged sword for Indian deep tech startups. Whereas pooling long-term capital and giving a unified voice to the federal government seems to be a boon, there’s threat if coordination falters, leaving promising corporations caught within the gaps.
“Over the following decade, startups will construct in India and export breakthrough options to the world. The tailwinds are in place: ambition, expertise, coverage intent, and affected person capital,” mentioned Accel accomplice Anand Daniel in a ready assertion.