It would bolster R&D activities and intellectual property creation.
NEW DELHI: A dedicated fund backed by venture capitalists to promote deeptech, and defence and aerospace technologies, is likely to be unveiled in India in July, a former top official said.
The VC fund would bolster research and development (R&D) activities, and facilitate intellectual property (IP) creation, in line with Indian Prime Minister Narendra Modi's Atmanirbhar Bharat (self-reliant India) ambition.
"I and some of my friends take a lot of pride in creating a venture capital fund that focuses on the strategic sectors like defense and aerospace, which requires significantly more capital and risk-taking than software or e-commerce investments,” Dr. Ajay Kumar, former secretary, Ministry of Defence Wednesday said.
From a business perspective, the VC fund, according to him, has a significance in the space sector which serves both -- civilian and defence customers.
Deep tech refers to innovations based on advanced scientific and technological breakthroughs having disruptive in nature.
Considering the immense potential of deep tech, the Indian government has recently unveiled the draft National Deep Tech Startup Policy (NDTSP) aimed to stimulate innovation, spur economic growth, and promote societal development through research-driven innovations.
The policy initiative aims to address the challenges confronting deep tech startups, and enable a conducive ecosystem.
Kumar said that the upcoming fund will boost startups as the prime contractors in the industry continue to be public sector undertakings, and it would also cater to the defense forces directly and support the defense export market.
“Given the fact that 75% of the defense project procurement is for the domestic sector, there is a big opportunity for the Indian industry to be able to participate in this regard. The latest iDEX (Innovations for Defence Excellence) program has Rs 25 crores of grants available and I think the space sector will be a big beneficiary of the R&D program.”
One of the flagship initiatives of the Ministry of Defence, iDEX has achieved a historic milestone by signing its 350th contract on June 25, 2024, in New Delhi.
It has partnered with SpacePixxel Technologies to design and develop a miniaturised satellite capable of carrying advanced payloads up to 150 kilograms for the Indian Air Force.
"We are likely to announce the first close in excess of our target within the next couple of weeks. This is going to grow in the future in a very big way,” the former official said.
Further, he said that the defense sector is witnessing heightened traction for initial public offerings (IPOs), and this trend would likely extend to the space sector too.
“In the next two to four years, we will see space sector startups and small companies coming into the IPO market and that will provide another opportunity for investors who are today putting their confidence in this sector.”
“In the next two to four years, we will see space sector startups and small companies coming into the IPO market and that will provide another opportunity for investors who are today putting their confidence in this sector.”
The San Francisco-based VC fund Celesta Capital earlier said that it wanted to increase investments in India into startups that could create products and solutions for global markets.
Celesta Capital, a multi-stage deept tech-focussed venture capital (VC) fund, having more than 15 startups onboard, has invested close to $100 million.