Chennai-based investment firm Bluehill VC is planning to ramp up its bets on intellectual property-driven deeptech startups, with five early-stage investments expected by the end of FY26. With a sharp focus on sectors like semiconductors, defence, energy, and advanced materials, the firm is looking to back startups working on foundational technologies where India has both a strategic need and growing technical depth.
“These are segments where we see the potential for globally relevant innovation,” Manu Iyer, general partner and co-founder at Bluehill VC, told Fe. The firm is deploying capital from its $50 million fund and is targeting initial investments of $1–1.5 million, with a follow-on capacity of up to $3 million. Investments will typically be made between the pre-Series A and Series A stages.
Bluehill has already made one investment this financial year, with a few others in the pipeline. Notable portfolio companies include Ethereal Exploration Guild and Zebu Intelligent Systems. “EtherealX is reimagining launch vehicles from first principles, and could challenge incumbents like SpaceX if they can become the first to showcase reusability of the second stage,” Iyer said.
Bluehill’s investment strategy hinges on three core filters — a world-class technical team with proven execution, bold and defensible tech differentiation, and a clear path to building a strategic moat.
As deeptech gains traction in India, more venture capital firms are entering the space. According to a Venture Intelligence report, deeptech investments doubled to $324 million across 35 deals in the first four months of 2025, compared to $156 million in the same period last year.
“The availability of more capital will attract more builders to deeptech,” Iyer said, adding that the presence of large, sector-agnostic VCs in the space is encouraging for early-stage firms seeking follow-on funding and eventual exits.
He also pointed to India’s potential to emerge as a global IP-led innovation hub. “We are seeing experienced founders returning from global tech companies to work on core problems here,” Iyer noted. “Retaining such talent in India will give the ecosystem a strong boost,” he added.