India’s PhD founders get a second look from VCs as deeptech booms

Gunjan Kapadia was 30, married and seven years into a career when he quit his job. His family expected him to start a company. Instead he went back to IIT Madras for a PhD in chemical engineering.

“I was making much more money. I was married at that point,” Kapadia said. “My family was a bit sceptical. They kept asking, ‘Why do you want to go for a PhD? You can get a job.’”

Kapadia entered the programme with a clear ambition: solve a deep scientific problem and build a company around it. Two years ago, he and two other IIT-M doctoral students launched Sthyr Energy. The deeptech startup raised $1 million in seed funding last year. Its target is mechanically rechargeable zinc-air battery systems for long-duration energy storage – a cheaper, more stable alternative to lithium-ion.

India has produced PhD entrepreneurs before. Zoho Corp’s Sridhar Vembu holds a Princeton PhD. Sarvam AI’s Vivek Raghavan has one from Carnegie Mellon. Choosing a PhD specifically to build a startup remains a still-evolving genre. It demands years of research, patient capital and a bet that deeptech will reward scientific depth over speed.

The archetypal Indian startup founder of the past decade was an IIT or IIM graduate running a consumer-internet business – building technology layers over existing services rather than developing core technology in-house. That is changing as geopolitics reshapes global supply chains and investors hunt for the next wave in AI, semiconductors, advanced manufacturing and clean energy.

Funding data from Tracxn shows India’s deeptech sector raised $1.47 billion in 2025, up from $484 million in 2020. The number of deeptech startups grew from about 2,700 in 2022 to more than 4,200 by 2025, according to Nasscom and consulting firm Zinnov.

Universities are redesigning PhD programmes to match. BITS Pilani launched its PhD-Drive programme in 2023 to encourage researchers to commercialise their work. It is designed to address a barrier young researchers face: taking entrepreneurial risks immediately after finishing a doctorate.

“By the time one finishes a PhD, one is 26-27 years of age,” said Prof. V. Ramgopal Rao, group vice-chancellor of BITS Pilani Campuses. “At that time, to take a plunge into startups is very rare with our family, friends, and all of that in India. So many of them don’t go to build startups. They need to settle down. We said, ‘those aspects we will take care.’”

The programme trains students to identify intellectual property opportunities, develop business models, pitch to investors and navigate certification requirements. Over the past decade, deeptech startups founded by BITS Pilani alumni have raised $549.6 million, per Tracxn. IIT-Madras alumni have raised $1 billion.

Around 700 km from Chennai, in Kerala’s Ernakulam, Yadukrishnan K. wanted to build a deeptech startup. He could not convince his family. Then he found an applied PhD programme at BITS Pilani’s School of Interdisciplinary Research and Entrepreneurship where the end goal was a startup.

“For my family, the PhD became the safer option,” he said. “Starting a startup directly sounded risky. When it came with a PhD, it was much easier to convince them.” BITS Pilani is now incubating his Mediqor Aid Technologies, which is developing an automated medical bed for bedridden patients.

The shift from distribution-led tech to deeptech reflects a structural change in India’s economy. Middle-class consumption is no longer growing 15–18% annually as it did a decade ago, said Ashish Kumar, co-founder and general partner at F2A, a ₹3,000 crore venture capital platform anchored by Infosys co-founder Nandan Nilekani. “When the next generation of founders comes in, they will have to look for opportunities where growth rates are much higher.”

Kumar sees the deeptech opportunity in sovereign product innovation. “Because of geopolitical realities, countries are pushing to build the supply chain for certain critical infrastructure and critical applications domestically,” he said. “This requires product innovation, which in turn requires people with deep research backgrounds and PhDs. Distribution innovation – which is what India excelled at over the last 10 to 15 years – required founders who were much more business-oriented.”

For founders, a doctoral programme focused on converting into a startup offers access to laboratories, mentors, industry networks and government funding that can blunt the risks of developing new technology. “If you are doing a PhD in a good institute you get a lot of government grants to de-risk the science part of it,” said Kapadia. “Anyone would not want to invest in a project just because it seems interesting. That risk you can take when you are in your PhD.”

IIT Hyderabad is also planning a PhD programme focused on commercially viable products. “I’m approaching a large number of industries to see if they can support a PhD programme that will lead to a product rather than just a thesis,” said director Prof. B. S. Murty in a YouTube video.

Such industry-academia partnerships are key to nurturing an innovation culture that India acutely lacks. The Economic Survey 2025-26 noted the private sector accounted for only about 41% of India’s gross expenditure on research and development. In the US and China, businesses fund more than 70%.

Investors are willing to back the progress so far. “We’re definitely looking at a lot more deeptech opportunities,” said Anirudh Damani, managing partner of Artha Venture Fund, which is in talks to sign MOUs with incubators at legacy Indian universities. “We are partnering with more universities so that we get access to deal flow much earlier, probably around the ideation stage.”

India faces a shortage of deeptech talent. In AI, the country had about 420,000 professionals in 2024 against an estimated demand for 600,000, according to a Nasscom-McKinsey report. India currently has 7,504 deeptech startups, much fewer than the 26,258 in the US, per Tracxn.

“Deeptech often rewards specialists,” said Vishesh Rajaram, managing partner at early-stage VC firm Speciale Invest. “Whether it’s battery chemistry or RF hardware, it takes three to four years of dedicated work just to develop a real feel for the sector. That’s why we gravitate toward founders with deep institutional grounding in technology. Sixty percent of our investments have gone to founders with this kind of technology-institution affiliation.”

For F2A’s Kumar, a PhD offers a filter for evaluating investments. “If you look at the first 10 to 15 people in an AI or deeptech company, our expectation is that roughly 20–25% of them should have very deep technical expertise in the specific domain,” he said.

Nearly 70% of deeptech funding in India is concentrated in early-stage rounds, leaving few companies able to secure Series B and later-stage capital for commercialisation, per a report by Kae Capital and TDK Ventures. “These startups will take time to mature and the ecosystem would need to keep pace on aspects such as regulation and funding,” said Janak Nabar, chief executive of the Centre for Technology, Innovation and Economic Research. “The building blocks are in place, it will take time.”

C. S. Murali, chairman of STEM at IISc’s Foundation for Science, Innovation and Development, sees evidence of progress. FSID has supported around 140 startups over the past decade, most in deeptech. “With all the developments that have happened in India in the last 10–15 years, there is an increasing recognition that there are a lot of problems to be solved in India itself where science can solve those problems a lot more effectively,” he said.