IIT Madras, IIT Madras Research Park (IITMRP) and Unicorn India Ventures on Saturday announced a Rs 450-crore first close of their Rs 1,000-crore IITM Unicorn Frontier Fund I at the IIT Madras Alumni Association’s Sangam 2026 conference in Bengaluru. The announcement was made in the presence of Finance Minister Nirmala Sitharaman. The fund has also invested nearly Rs 55 crore in four deeptech startups.

The Rs 1,000-crore target corpus includes a Rs 400-crore greenshoe option. The fund expects its final close by end of this year. IIT Madras alumni account for 30-35% of the first close, with the rest coming from financial institutions and limited partners who backed Unicorn India Ventures’ earlier funds, Natarajan Malupillai, group CEO of IITM Research Park, Incubation Cell and RTBI, told FE.

The four startups are Chennai-based Hathor, which builds semi-cryogenic and cryogenic rocket engines for small and medium satellite launch vehicles; Delhi-based Quanastra, which develops single-photon detection systems and quantum instrumentation; Triolt Energy, which makes lithium-ion battery cells for drones and fast-charging electric vehicles; and Carbelim, which builds carbon-capture and air-purification systems using microalgae.

The fund will target investments cross defence, space, semiconductors, manufacturing and robotics, AI infrastructure and health tech. Investments will be screened for export potential, import substitution and strategic technological advantage. Malupillai said the fund is particularly focused on space, semiconductors, quantum, and critical materials for batteries and electric mobility.

The fund plans to build a portfolio of 25 IP-led, engineering-heavy startups, with an average cheque size of Rs 15-25 crore. It will take a 10-20% stake in each startup. Most investments will be in early-stage companies at technology readiness levels (TRL) 3-4, where technologies have been proven in the lab but are yet to be tested in real-world conditions.

The bulk of the corpus will be reserved for follow-on rounds. “Initial portfolio construction would be around 40%, with the remaining earmarked for follow-on rounds,” Malupillai said. Co-investors are expected to participate in these rounds, while Unicorn India Ventures will also raise co-investment capital beyond the main corpus.

The fund has a 10-year life, extendable by two years, and expects to make its initial investments within three years. “At IIT Madras, we have built an ecosystem that has nurtured several deep tech companies who have consistently demonstrated TRL growth… these companies will not only get access to patient capital but also strategic growth guidance,” said Kamakoti Veezhinathan, director, IIT Madras.