A new alliance formed by eight prominent U.S. and Indian venture capital and private equity firms aims to invest over $1 billion into India’s burgeoning deep tech startup ecosystem. This effort unites companies including Accel, Blume Ventures, Celesta Capital, and Premji Invest under this new umbrella. Its goal is to augment technological connections between the two countries by targeting key, enabling technologies like artificial intelligence, semiconductors, and biotech.
The alliance comes at a pivotal time. As an illustration, the Indian government recently approved its first-ever scheme for R&D—₹1 trillion (around $11 billion) for Research, Development and Innovation (RDI). Funding will boost other “sunrise” industries. This funding aims to pump the brakes on wildfire destruction and speed up startup growth. The VCs in the innovation alliance want to use this initiative on behalf of their investment. They want to position their portfolio companies to enter and scale in the Indian market and beyond.
At that event, then-partner Anand Daniel stated the strategic importance of this initiative very well. He stated, “Over the next decade, startups will build in India and export breakthrough solutions to the world. The tailwinds are in place: ambition, talent, policy intent, and patient capital.” This new optimism is underpinned by an increasing confidence that India can position itself as a global manufacturing and innovation hub for new technologies.
Throughout the event, Sriram Vishwanathan, founding managing partner at Celesta Capital, reiterated the alliance’s commitment to those early-stage startups. They specifically focus on tech companies that are raising capital from seed rounds to Series B. He added that the tech transfer effort would purposely steer clear of late-stage investments. Vishwanathan remarked, “We find India as a particularly interesting market, not just for the opportunities that exist for new companies that get started in India, but for companies in the U.S. that are seeking to expand into the Indian market.”
The alliance seeks to bridge a significant funding chasm for deep tech startups in India. Too many founders have shared with us their struggles to obtain the financing needed to scale their visionary ideas. This new effort intends to attract more long-term private capital into these endeavors, helping to pump so much more activity into the ecosystem. Vishwanathan stated, “We have put this thing together to actually energize the ecosystem and bring like-minded investors together.”
Arun Kumar, managing partner at Celesta Capital, will be the alliance’s first chair. He then said, as the leadership of the burgeoning alliance will continue to rotate for now. Kumar remarked on the collaboration’s alignment with broader governmental interests: “This is in line with the strategic interests of both India and the U.S. at the governmental level, focusing on critical and emerging technologies.”
The newly formed alliance hopes to act as a base for mobilizing towards government institutions, Vishwanathan says. He stated, “The alliance is just a platform for engaging with the government.” This connection with government stakeholders will be invaluable in expediting all necessary regulatory and approvals. It would do so by far improving the overall investment environment for tech startups.
The possibilities for deeper and wider growth of this coalition are enormous. Vishwanathan signaled that other companies would be coming on board in the future, including financial VC companies and private equity companies. He floated the idea that large corporate actors with big capital expenditure plans should be allowed to join. “You could expect more firms to join this alliance,” he said.