India has a strong and growing pipeline of deep tech startups

Equirus InnovateX Fund (EIF) is a specialized venture capital fund dedicated to backing the next generation of B2B tech, SaaS, and deep tech pioneers. Built on a unique "by founders, for founders" philosophy, EIF differentiates itself through an operator-led DNA, where every decision-maker brings first-hand experience in scaling complex businesses.

The fund focuses on high-potential startups at the intersection of scientific breakthrough and market insight - prioritizing technical defensibility and long-term resilience over mere speed. By leveraging the extensive Equirus ecosystem, EIF provides more than just capital, offering founders strategic mentorship in GTM execution, pricing, and global scaling to transform India's R&D excellence into commercial success.

India now has a strong and growing pipeline “of deep tech startups”, says Sadhika Agarwal, Lead-Investments, Equirus InnovateX Fund in an exclusive interaction with Bizz Buzz

How do you see the current market sentiment shaping early-stage investments in India, especially in tech-led and innovation-first sectors?

India now has a strong and growing pipeline of deep tech startups. Many of these companies have spent the past 5-7 years in labs - proving out science, building core IP, and navigating complex R&D cycles. That phase is now reaching a tipping point.

Over the next 2–3 years, a significant chunk of this cohort will move from R&D to early commercialisation. With this, we expect to see a sharp rise in Series A and Series B rounds in deep tech – by companies that are now gearing up for the market.

This will also mean a new breed of deep tech venture capital funds: growth stage, but that understand the patience, specialisation, and capital structuring needed to back these companies through their early commercialisation years.

Which emerging sectors do you believe are poised for accelerated growth in 2026 and what macro trends are driving this shift?

We’re doubling down on specialised Vertical SaaS, Applied AI, and Deep Tech. Within Deep Tech, we’re particularly bullish on data centre infrastructure, advanced manufacturing, materials innovation, and robotics.

What’s different this time is that the building blocks are finally in place - strong research and patent activity from our premier institutions, a reverse brain drain bringing experienced operators back to India, and a growing comfort among both government and private capital to back longer-cycle technologies.

How has the rise of deeptech, AI and frontier technologies influenced investment priorities within the Indian startup ecosystem?

Investment priorities have fundamentally shifted. There’s now far greater comfort backing IP-led, science-driven products, where the core question has moved from GTM mechanics to what is truly differentiated and defensible in the technology.

What was once seen as long-gestation and unfundable is now viewed as a credible path to building global companies from India. Capital increasingly values engineering depth and product innovation, raising the bar across the ecosystem and making technical differentiation central to investment decisions.

What challenges do first-time founders commonly face in raising funds today and how can they navigate the increasingly competitive landscape?

First-time founders today are operating in a far more competitive capital environment, where the pace of new products or ventures has outpaced the availability of early-stage capital. As a result, investors keep becoming more selective.

There is a natural bias toward second-time founders, given their exposure to multiple business and market cycles and having navigated setbacks.

That said, first-time founders can still break through by demonstrating strength in the most critical functions early on, say - product development and sales - and by showing real depth of insight into the problem they’re solving. A clear, credible execution plan goes a long way in building investor confidence.

How do you foresee regulatory shifts and the evolving compliance environment impacting VC investments over the next 12–18 months?

Regulatory shifts tend to be a headwind for some sectors and a tailwind for others. In the current cycle, they largely fall in the latter. Increased regulatory clarity and policy have expanded the opportunity set in areas like energy efficiency/climate tech, defence and aerospace, and semiconductors and advanced electronics.

In these sectors, regulation is not a compliance layer but a demand catalyst. It has shaped procurement priorities, accelerated indigenisation, and de-risked otherwise long-gestation investments.

What was the core vision behind launching the Equirus InnovateX Fund and how does it differentiate itself in India’s venture ecosystem?

The core vision behind launching EIF was the conviction, even three years ago, that India was entering a decade defined by breakthroughs in deep science and technology. We believed early that backing these categories requires a fundamentally different investing approach.

InnovateX was therefore built on a “by founders, for founders” philosophy - distinct from a consulting-led or purely financial lens. Everyone involved in decision-making, from the investment team to the IC and LP base, is an ex-entrepreneur or operator, bringing firsthand experience of building through uncertainty.

This operator-led DNA is what differentiates us and allows us to engage meaningfully with founders tackling technically complex, long-cycle problems.

Which specific sectors or themes does EIF prioritise and what defines a ‘high-potential’ startup for the fund?

EIF invests in B2B tech, with core emphasis on SaaS, Deep Tech, and Fintech. We prioritise companies with deep, defensible, technology-led products that can either create new markets or meaningfully reshape existing ones.

For us, a high-potential startup sits at the intersection of deep technical or scientific capability and clear market insight - founders who not only build differentiated technology but also understand customer pain points, adoption dynamics, and the realities of scaling enterprise businesses.

Could you share your investment philosophy at InnovateX — what criteria or signals do you look for beyond product and traction?

We pay close attention to founder-market fit and the depth of thinking the founder brings to the problem. Clarity in vision, adaptability in execution and a strong sense of building sustainably.

Founding team’s ability to navigate constraints, reflecting long-term resilience and strategic maturity is a critical signal for us.

How is the fund supporting startups beyond capital, particularly in terms of mentorship, scaling strategy and market access?

Our hands-on approach often begins even before we invest. Actively support founders on go-to-market, pricing decisions, key hires, assimilate early feedback into product/tech strategy and expansion planning. Through the larger Equirus ecosystem, founders also gain access to expertise across our industry network.

What kinds of founders or founding teams tend to resonate most with InnovateX’s investment thesis?

Founders who possess strong technical capability, sharp domain knowledge and a deep, almost obsessive understanding of the problem they are solving.

Teams that combine vision with execution discipline, customer empathy and a willingness to learn tend to align most closely with our investment approach. We value founders who think long-term and build companies with substance rather than speed alone.

How does the fund view innovation coming from Tier 2 and Tier 3 cities and are you seeing stronger participation from these regions?

Innovation in India is decentralising. We’re seeing strong technical talent and entrepreneurial ambition emerge from Tier 2 and Tier 3 cities, supported by improved digital infrastructure and the normalization of distributed teams. The need to be physically co-located with customers has reduced.

For us, location is secondary to quality. Several high-potential companies in our pipeline are coming from outside the metros, and we expect this trend to accelerate over the next few years.

What can the ecosystem expect next from the Equirus InnovateX Fund — any focus areas, upcoming investments or new initiatives?

Over the next year, our focus will be on scaling the existing portfolio while laying the groundwork for the next fund under the InnovateX umbrella. On the investment side, we’re actively evaluating opportunities in deep tech, defence tech, industry 3.0, and other frontier technologies and AI-first enterprise products.

Longer term, our ambition is to build InnovateX into a multi-fund platform that serves as a long-term partner to early-stage technology founders in India, across multiple stages of their journey.