Deeptech funding to collect momentum in 2026 as VC corporations dig deep with cautious optimism

The frequent chorus by enterprise capital corporations this 12 months was that they’d step up investments within the deeptech sector. Knowledge from market intelligence platform Tracxn signifies that VCs have delivered on this promise. And the momentum is predicted to choose up within the coming 12 months. 

As of December 2025, bets within the deeptech sector have seen a marginal enhance in funding in comparison with 2024, with capital flowing into early-stage startups within the phase. Based on knowledge from Tracxn, deeptech firms raised $1.57 billion throughout 265 offers year-to-date, in comparison with $1.24 billion raised in 2024 throughout 388 rounds—indicating that, whereas traders had been extra cautious this 12 months, they wrote greater cheques to deeptech startups. 

A slew of Indian enterprise capital corporations raised new funds in 2025—Accel closed a fund at $650 million, whereas Nexus Enterprise Companions closed a fund at $700 million, proving that India’s VC ecosystem is flush with money. 

In September, eight enterprise capital and personal fairness corporations from India and america teamed as much as launch the India Deep Tech Funding Alliance, which Accel is part of. 

A string of deeptech centered funds additionally raised new capital stockpiles this 12 months. In July, Yali Capital, which counts Intel CEO and veteran investor Lip-Bu Tan as amongst its advisors, raised Rs 893 crore to fund deeptech startups. 

Many deeptech centered funds additionally raised maiden funds in 2025, demonstrating that capital movement into IP-driven firms is predicted to take off subsequent 12 months. 

Speciale Make investments, which specialises in deeptech, SaaS, and AI/ML startups, doubled down on the sector. In December, Speciale Make investments stated it’s seeking to increase a Rs 1,400 crore fund to assist early-stage startups increase follow-on capital, a persistent wrestle amongst these firms which have a relatively longer gestation interval.

The explanations for heightened focus within the deeptech ecosystem are aplenty. Regulatory tailwinds is one in all them.

The Division of Science and Expertise has launched the Analysis, Improvement, and Innovation Scheme, underneath which the federal government has put aside a Rs 1 lakh crore fund to again R&D in an try and foster a non-public sector-driven innovation ecosystem by way of long-term, low-interest loans for deeptech ventures. 

In April, Union Commerce Minister Piyush Goyal criticised the Indian startup ecosystem, noting that whereas many startups had been specializing in meals supply and fantasy sports activities apps, firms in different international locations had been engaged on EV, battery-tech, semi-conductors, and AI. 

This sparked an enormous debate on social media with traders, startup founders, and consultants weighing in on the matter. Within the following months, ‘deeptech’ grew to become the topic of a number of roundtables and panel discussions. The momentum is predicted to collect steam in 2026, shifting past discussions. 

Deeptech investments are anticipated to step by step rise within the coming years as extra firms mature and lift bigger rounds of funding. Primarily based on this 12 months’s developments, semiconductors, synthetic intelligence, and space-tech are anticipated to see rising investor curiosity. 

Nevertheless, traders will proceed to undertake a cautious and selective stance. 

Deeptech startups are a tricky promote to traders as a result of lengthy gestation durations and the steep trajectory to income era, amongst different challenges. So as to add to this, the expertise being developed by these corporations is complicated and requires a deep understanding of the sector, making it a troublesome pitch to traders. 

Because of this, there is probably not an enormous variety of offers within the sector however VC corporations are prone to write bigger cheques to firms which have a confirmed product-market match, decrease technical dangers, and robust fundamentals.