The U.S. and Indian venture capital and private equity firms have formed a coalition to support India’s deep tech startups. They have pledged over $1 billion over the next decade. The alliance aims to strengthen U.S.-India tech ties.
It also wants to address funding challenges in India’s deep tech sector. Investors like Accel, Blume Ventures, Celesta Capital, and Premji Invest are part of this coalition. It is unusual for investors to formally band together under a named alliance with binding pledges.
The alliance is named the India Deep Tech Investment Alliance. It also includes Gaja Capital, Ideaspring Capital, Tenacity Ventures, and Venture Catalysts. This initiative follows the Indian government’s ₹1 trillion ($11 billion) Research, Development, and Innovation (RDI) scheme.
The scheme was announced earlier this year to boost deep tech R&D. Under the alliance, each member will commit private capital over a five to ten-year period to Indian-domiciled deep tech startups. Many of India’s prominent deep tech ventures are incorporated in the U.S. But new government incentives now require local incorporation.
Alliance members will also provide mentorship and network access. They plan to help their portfolio companies expand into the Indian market. Celesta Capital managing partner Arun Kumar is the inaugural chair of the alliance.
He said, “This initiative is in line with the strategic interests of both India and the U.S. at the governmental level, focusing on critical and emerging technologies.”
The alliance aims to position India as a hub for startups developing foundational technologies.
Securing funds for India’s deep tech
These include AI, semiconductors, space technology, quantum computing, robotics, biotech, energy, and climate tech.
Sriram Viswanathan, founding managing partner at Celesta Capital, emphasized the significance of energizing the ecosystem. He also stressed the importance of bringing together like-minded investors. The alliance will focus on early-stage startups — from seed to Series B.
It will steer clear of late-stage investments. Viswanathan noted that the billion-dollar commitment is just the beginning of a long-term investment strategy. More firms, including corporates with significant investment programs, are expected to join the alliance.
Participants must meet the government’s RDI scheme conditions, such as investing in India-domiciled startups and securing local regulatory approvals. The alliance members plan to share information voluntarily. They will also coordinate on pipeline development, due diligence, and co-investment opportunities.
An advisory committee will guide shared objectives and ensure coordination. It will include representatives from Accel, Premji Invest, and Venture Catalysts. Leadership of the alliance will rotate as it progresses.
Accel partner Anand Daniel commented, “Over the next decade, startups will build in India and export breakthrough solutions to the world. The tailwinds are in place: ambition, talent, policy intent, and patient capital.”
The coalition’s bold move is a significant step toward bolstering India’s deep tech ecosystem. It has the potential for significant long-term impacts on the global tech landscape.