**Title:** Deeptech Investments Surge as Major Funds Shift Focus
**Meta Description:** Major investment firms are increasingly targeting deeptech, with significant funding flowing into sectors like aerospace and advanced manufacturing.
**URL Slug:** deeptech-investments-surge-funds-focus
**Headline:** Major Investment Firms Shift Focus to Deeptech, Fueling Growth in Aerospace and Advanced Manufacturing
The landscape of venture capital is evolving as prominent funds such as Peak XV Partners, Accel, and Elevation Capital are increasingly directing their attention towards deeptech. This year, Peak XV has already made several stealth investments in the sector, while Accel has finalized four deals spanning aerospace and advanced manufacturing, covering seed, Series A, and Series B investments. Collectively, these companies have raised $63 million from Accel and other investors, signaling a robust interest in deeptech.
Accel’s global investments in deeptech this year include a notable $3 million seed investment in Nabhdrishti Aerospace, a micro gas turbine firm. Additionally, Accel has committed $10 million in Series A funding to Sarla Aviation, an electric vertical take-off and landing (eVTOL) manufacturer, and to Fabheads, a composites manufacturer. The firm also led a $40 million Series B round for Scimplify, a chemicals producer. Prashanth Prakash, a partner at Accel, emphasized the convergence of sectors such as industrial AI, robotics, material science, and precision manufacturing, which collectively contribute to advanced manufacturing.
Elevation Capital has also made strides in deeptech, investing $10 million in a Series A round for Jeh Aerospace, a company specializing in aerospace components. The firm has indicated a strategic shift, with more senior members of their investment team dedicating time to evaluate deeptech opportunities. Ashray Iyengar, a principal at Elevation Capital, noted this as a reallocation of resources towards a sector they believe holds significant potential. Between 2020 and 2024, Elevation Capital has invested in various startups, including General Autonomy, PierSight, SolarSquare, and Haber Water, all of which are at the forefront of technological innovation.
The growing focus on deeptech in India coincides with the ongoing competition between the US and China for technological supremacy. As India seeks to establish itself as a key player in this arena, government support has been evident, highlighted by the announcement of a ₹10,000 crore Fund of Funds aimed at channeling capital into deeptech ventures. This strategic move places India’s deeptech ecosystem at a pivotal moment, where generalist funds can complement specialist investors by not only making seed investments but also providing growth-stage capital.
Deeptech startups, which operate in advanced fields such as quantum computing, aerospace, robotics, and material science, typically face longer maturation cycles due to their focus on developing intellectual property. These companies often require substantial investments in time, money, and research. With generalist funds now entering the fray, they can offer larger investments to help these startups navigate their growth journeys.
Vishesh Rajaram, managing partner at deeptech, remarked on the previous lack of venture capital focus in this sector, attributing it to a shift towards fintech and software. He noted that the rise of artificial intelligence is now threatening the viability of many software companies, further emphasizing the need for investment in deeptech.
**FAQ Section:**
**Q: Why are major investment firms focusing on deeptech now?**
A: Major investment firms are shifting their focus to deeptech due to its potential for innovation and growth, particularly in sectors like aerospace and advanced manufacturing, amidst global competition for technological leadership.
