IDTA looking to invest $10-$15 million in every startup across sectors

Kumar, former India head of KPMG, said Celesta will bet on start-ups in the space and biotech sectors while also looking out for AI companies that work with global capability centres (GCCs) in India

India Deep Tech Alliance (IDTA), a consortium of venture capital funds and big corporations such as Nvidia and Qualcomm, is looking to invest about $10-$15 million in every startup across space, semiconductor, artificial intelligence and defence sectors, two executives of member VC funds said.

 

IDTA was unveiled at Semicon India earlier this year with an initial capital commitment of $1 billion from global and Indian investors. Some of the founding members include Celesta Capital, Accel, Premji Invest, Venture Catalysts, Bloom VC, Gaja Capital, Ideaspring and Tenacity Ventures.

 

“Most of the funding will be in seed or Series A and Series B funding, though each fund has a different style of investing,” Arun Kumar, managing partner at Celesta Capital, said in an interaction. “Our target is at about $10-$15 million in each company as most funds are reserved for the successful stages.”

 

Kumar, former India head of KPMG, said Celesta will bet on startups in the space and biotech sector, while also looking out for AI companies that work with global capability centres (GCC) in India.

 

Deeptech startup funding in India surged 78 per cent to $1.6 billion last year, but still accounted for only about one-fifth of the $7.4 billion raised overall, according to a report by industry body Nasscom.

 

The reason being that most of these companies have long development timelines and the path to profitability remains unclear, which often deters private equity and VC funds that look for a fixed time horizon to exit and maximise returns.

 

Last week, Nvidia joined the alliance, which should provide greater fillip to the deeptech startup ecosystem. Qualcomm Ventures, Activate AI, InfoEdge Ventures, Chirate Ventures and Kalaari Capital are among the new investors joining the IDTA.

 

Nvidia, which joined as a founding member and strategic advisor to the group, will provide technical guidance, training and policy input to help Indian deeptech startups adopt its AI and computing tools.

 

Ravi Kiran Vadapally of Premji Invest said his company will be focusing on defence and semiconductor companies as part of its investment strategy.

 

“Each VC has committed to invest about $125 million over the next three to five years. It is the best way to channelise capital to the founders and provide a single voice to the government. It is the ecosystem creation that needs to be done which is holding back the development of large deeptech cos in India,” he added.

 

IDTA is designed to build on the momentum of India's recently launched Research Development and Innovation Scheme, a ~1 trillion initiative to scale research and development across strategic technology sectors.