Deeptech investments, which currently account for just 10-15% of venture capital allocation in the country, are expected to triple their share to 25-30% within the next 2-3 years, rivaling consumer tech and fintech in investor mindshare, Accel founding partner Prashanth Prakash said on Tuesday.
“After all that urban convenience driven activity of delivering things in 10-15 minutes, I think the ecosystem recognises it’s time to build some complex intellectual property driven and engineering led businesses,” Prakash said while speaking at the Bengaluru Tech Summit 2025. He said that there’s a shift happening in investors’ appetite towards deep technology ventures.
According to Prakash, fintech and consumer tech will continue to receive major allocations, but deeptech’s share is set to grow substantially from its current 5-10% range. “I predict that deeptech will get to about 25-30% and be as big as consumer tech in the next 2-3 years,” he said.
Investors are increasingly drawn to deep tech businesses because they offer multiple layers of intellectual property protection, making them harder to replicate, Prakash said. “VCs like businesses that have not one but multiple moats and good IP,” he said, citing examples of companies with patents spanning mechanical systems, materials, coatings and electronics.
Consumer businesses, by contrast, are “easy to build but also easy to get disrupted,” he added, explaining why investors are seeking ventures with stronger competitive advantages.
Prakash outlined several sectors attracting increased interest: semiconductors driven by sovereign supply chain requirements, the electric vehicle supply chain including motors and allied components, segments of the space technology supply chain beyond launchers, and precision manufacturing for aerospace and semiconductor production equipment.
He also highlighted process innovation in industries like chemicals, where AI is being deployed to accelerate research and development.
The improving alignment between government, investors and entrepreneurs is evident in faster infrastructure development, Prakash said. While IIT Chennai Research Park took 12 years to build, the Applied Research and Technology Park came up in just three years, demonstrating better focus and execution, he added.
