India's startup landscape is undergoing a quiet revolution, with a new breed of entrepreneurs emerging from the shadows of traditional IIT and IIM graduates. The country's focus on AI, semiconductors, and advanced manufacturing is driving a shift towards deeptech startups, where PhDs are becoming the new currency. This trend is not just a passing fad but a strategic move to build a self-reliant, innovation-driven economy. As geopolitics reshapes global supply chains, India is betting on its deeptech ecosystem to create a new wave of growth, with investors and universities playing pivotal roles in this transformation.
The story of Gunjan Kapadia, a chemical engineering PhD, is a testament to this change. Kapadia's decision to pursue a PhD was not just about academic achievement; it was a calculated move to build a company around a scientific problem. His startup, Sthyr Energy, is developing mechanically rechargeable zinc-air battery systems, a cheaper and more stable alternative to lithium-ion batteries. This is not an isolated case; several other PhD entrepreneurs, like Sridhar Vembu (Zoho Corp) and Vivek Raghavan (Sarvam AI), are leading the charge.
The Indian Institute of Technology, Madras (IIT-M), has been a key enabler in this transformation. Its robust ecosystem, including the IIT Madras Incubation Cell (IITMIC), has supported over 560 startups with a combined valuation of over ₹74,000 crore. The institute's focus on deeptech has led to the emergence of well-known startups like Ather Energy, Uniphore, and MediBuddy.
The shift towards deeptech is not just about the emergence of new startups; it's also about the changing nature of the Indian startup ecosystem. For much of the past decade, the archetypal Indian startup founder has been an IIT engineer or an IIM graduate running consumer-internet businesses. However, as geopolitics reshapes global supply chains, the spotlight is turning to research-led startups.
This trend is reflected in the funding that India's deeptech sector has received. According to data platform Tracxn, the sector's funding jumped from $484 million in 2020 to $1.47 billion in 2025. The number of deeptech startups also increased from about 2,700 in 2022 to over 4,200 by 2025, according to Nasscom and consulting firm Zinnov.
Universities are playing a crucial role in this transformation. They are redesigning their PhD programs to encourage researchers to commercialize their work through deeptech startups. The Birla Institute of Technology and Science, Pilani (BITS Pilani), has launched its PhD-Drive program to address the biggest barrier faced by young researchers: taking entrepreneurial risks immediately after completing a doctoral program.
The program trains students to identify intellectual property opportunities, develop business models, pitch to investors, navigate certification requirements, and understand the realities of building a company. Over the past decade, deeptech startups founded by BITS Pilani alumni have collectively raised $549.6 million, while those founded by IIT-M alumni have raised $1 billion.
The growing pursuit of innovation-led startups coincides with an emerging shift in India's startup ecosystem from distribution-led tech businesses to deeptech sectors. As middle-class and upper-middle-class consumption in India grows more in line with the country's GDP, the next generation of founders will have to look for opportunities where growth rates are much higher.
This shift is also evident in the funding that India's deeptech sector has received. According to Tracxn, the sector's funding jumped from $484 million in 2020 to $1.47 billion in 2025. The number of deeptech startups also increased from about 2,700 in 2022 to over 4,200 by 2025, according to Nasscom and consulting firm Zinnov.
However, India faces a shortage of deeptech talent. In artificial intelligence, India had about 420,000 professionals in 2024 against an estimated demand for 600,000 experts, according to a report by Nasscom and consulting firm McKinsey. As for deeptech startups, India currently has 7,504 firms, much lower than the 26,258 in the US, according to Tracxn.
Founders and investors both see the opportunity evident in this shortage, with the PhD-to-entrepreneurship trend filling the funnel. For F2A's Ashish Kumar, a PhD offers a filter for evaluating investments. He expects that roughly 20-25% of the first 10 to 15 people in an AI or deeptech company should have very deep technical expertise in the specific domain and problem the company is trying to solve.
Despite the challenges, the ecosystem is maturing. Early-stage capital is available, and initiatives like the RDI fund are a positive step. However, the building blocks are in place, and it will take time for the ecosystem to evolve. For deeptech entrepreneurs like Kapadia and Yadukrishnan, the hope is that the ecosystem will mature fast enough to support their ambitions.
In conclusion, India's startup landscape is undergoing a quiet revolution, with a new breed of entrepreneurs emerging from the shadows of traditional IIT and IIM graduates. The country's focus on AI, semiconductors, and advanced manufacturing is driving a shift towards deeptech startups, where PhDs are becoming the new currency. As India bets on its deeptech ecosystem, the future looks bright for those who dare to innovate.
