The deeptech sector, long marked by slow revenue cycles and limited exit visibility, is beginning to show signs of acceleration.
Exit time compression
Investors who once planned for 10–12 year exit horizons now say the timelines are compressing to between six and nine years. The shift is coming at a time when companies such as Sedemac Mechatronics, Tonbo Imaging and Atomberg are preparing to tap the public markets, indicating that deeptech listings may increasingly become part of the mainstream startup exit landscape rather than rare outliers.
“The markets themselves have matured. Deeptech companies are scaling faster because of that,” says Vishesh Rajaram, co-founder and managing partner at Speciale Invest, which has backed companies such as Agnikul Cosmos and QNu Labs for nearly a decade. According to him, almost three-quarters of the firm’s 10–12 exits so far have been through strategic mergers and acquisitions, primarily by global players looking to acquire intellectual property. For IP-heavy startups valued between $100 million and $500 million, M&A continues to be the most likely liquidity route. Alongside that, secondary sales are becoming more common as growth funds step in seeking significant stakes in deeptech companies.
Larger financial investors appear set to play an even deeper role in this shift. “We expect eight out of ten of our exits to come from larger financial investors,” Sridhar Parthasarathy, co-founder and general partner at Bluehill.vc, told Fe. He points to the growing presence of global funds as well as specialised deeptech partners within established venture firms, which together are helping create a consistent pipeline of buyers for early investors who typically take the technology-risk bets.
Deeptech companies generally spend their first five to six years building core IP and refining products, a phase that rarely produces meaningful revenue. Investors in the earliest stages therefore base their decisions on qualitative markers such as demonstrated technical breakthroughs rather than commercial traction. But by year six, revenue starts to climb in a more predictable manner, making the growth-stage financing market more receptive than it was a few years ago.
Commercial mindset and global procurement
Part of this acceleration stems from the changing dynamics in deeptech-dominated sectors like defence, space, EVs and industrial automation. The procurement cycles of both governments and enterprises have become more structured and predictable, allowing startups to reach substantial revenue faster. Rajaram said that domestic and international pools of capital today are more comfortable underwriting deeptech at scale, a departure from earlier years when funding remained scarce beyond the seed and Series A stages.
Parthasarathy highlighted another change, which is that founders are approaching markets with a more commercial mindset from day one. “Earlier, many teams had an academia-first orientation. Now, even at the pre-seed stage, we work with founders on their go-to-market strategy,” he says.
Companies with export revenue, hardware-linked service offerings and clear Ebitda visibility are also beginning to view IPOs as realistic milestones. A few years ago, public markets struggled to evaluate science-centric companies. But with more reference points, such as ideaForge, Kaynes and Syrma, public investors have become more willing to look at complex technology businesses.
Global demand is adding momentum too. “Startups like Ultraviolette, Agnikul and Tonbo secured customers in the US, Europe and APAC long before they reached IPO scale. That creates earlier commercial validation and clearer pathways to exits,” Rajaram says.