By Riya Sethi
In recent years, startups have caught the imagination of India’s business circles with a few of them even going on to become unicorns. But beyond the aggregator models or SaaS-based enterprises, lies the DeepTech startup ecosystem where that kind of success has been elusive. But DeepTech is also perhaps the final frontier of technology—Artificial Intelligence, Internet of Things, Blockchain, machine learning, cybersecurity, augmented and virtual reality, natural language processing coming together to lead to significant scientific breakthroughs.
Sensing the hurdles prevailing in the DeepTech space, Nasscom had formed the DeepTech Club to enable networking, tech and business mentoring, market access, partnership and investment opportunities for startups. The association recently conducted the third edition of its DeepTech Club in Bengaluru. Some of the DeepTech startups that attended the confluence were Agrima Infotech, Wesense.ai, AutoGenerate.ai, Merak, Senseforth, and Medtra. The confluence kick-started with a 90-minute DeepTech strategy roundtable which was then followed by over 700 pre-matched one-on-one meetings wherein startups got a chance to pitch their ideas to enterprises and investors. Some of the investors that were present at the event were 100x VC, Ah!Ventures, Arali Ventures, Blume Ventures, Lets Venture, Qualcomm Ventures and pi Ventures.
Atul Batra, chair, Nasscom Product Council, said, “The need of the hour is a large DeepTech talent pool and incubation in the country, all catalysed by industry and government. Most DeepTech companies are B2B and building an enterprise business is a longer-term proposition.”
The longer gestation period and high investments in R&D demands more risk and patient capital which tends to make investors more cautious about investing their money in such business models. “The appetite for risk capital is much lower in India versus the US,” said Batra.
Entrepreneurs echo this view about investor apprehensions and expectations. Ashok Balasundaram, co-founder, Dave.AI, said,“Deep-tech requires a long period of technology development before we can have a working product. The space needs deep investment which means we are looking for investors who have both the patience and the vision to understand the long incubation period. Most institutional investors want to see a business problem being solved or even some revenue before they think of investing.”
Dave.AI is an AI platform that uses patent-pending deep neural networks and an online learning genetic algorithm to unearth multi-dimensional affinities between prospects, products and customers.
“As it takes a lot of R&D to commercialise and productify our innovation, we need VCs who are a little patient and understand the domain,” said Kunwar Raj, co-founder and CEO, inVOID. “Another challenge that we face is the never-ending proof-of-concept (POC). A lot of corporates and larger companies have become more accepting towards experimenting with DeepTech and AI, however, the conversion and POC cycles are extremely long.”
inVOID has built an AI-driven KYC platform for streamlining and automating user onboarding and identity verification operations. The startup was a part of Cohort 3 of Nasscom Confluence.
Given that big businesses would also benefit from DeepTech innovations, Nasscom hopes that these established firms would offer help to the fledging startups.
“Besides VCs, India businesses also need to start to invest in DeepTech startups. Without enough infusion of DeepTech based products and solutions, businesses across every industry vertical risk being disrupted within the next few years. Investment from businesses is yet to take off despite the fact that both DeepTech startups and businesses need each other equally,” said Batra. “It will be hard for a traditional business to organically disrupt itself with the latest DeepTech so they need to partner, invest, collaborate with the entrepreneurial ecosystem.”