Eight venture capital and private equity firms from the U.S. and India, including well-known investors Accel, Blume Ventures, Celesta Capital, and Premji Invest have established a unique coalition to support deep tech startups in India, committing over $1 billion in funding over the next decade to enhance technological cooperation between the U.S. and India.
This alliance is designed to resolve ongoing finance issues. In April, Indian Commerce Minister Piyush Goyal was scolded for blaming domestic startups for valuing food delivery services ahead of innovation and comparing them to China’s more well-funded counterparts in a slide presentation that had the title “India vs. China: The Startup Reality Check.” Several investors and entrepreneurs responded that India did not have sufficient funds for deep tech initiatives and that Goyal’s statement had failed to take into account the devotion of founders who were aiming at the domestic market. The new alliance appears to address such bottlenecks by allocating long-term private capital to deep tech startups, some of whose founders say have struggled to raise capital in India.
This initiative is notable because investors generally vie for opportunities rather than formally unite under a designated collective with binding commitments. While venture capitalists often co-invest on an individual deal basis, most cross-border collaboration typically takes place informally through separate fund strategies rather than through coordinated investment groups.
Dubbed the India Deep Tech Investment Alliance, the coalition includes Celesta Capital, Accel, Blume Ventures, Gaja Capital, Ideaspring Capital, Premji Invest, Tenacity Ventures, and Venture Catalysts, as announced in a joint statement on Tuesday. The formation of the alliance comes in the wake of the Indian government approving a ₹1 trillion (approximately $11 billion) Research, Development, and Innovation (RDI) initiative, which was revealed in the national budget earlier this year to promote R&D in deep tech.
As part of this alliance, every member will allocate private capital over a period of five to ten years to deep tech startups based in India, according to the firms. Presently, there are relatively few such startups, as many of India’s prominent deep tech companies with Indian founders are incorporated in the U.S. However, local incorporation has become a prerequisite for benefits under the new RDI initiative announced by New Delhi, which the coalition members plan to capitalize on.
Beyond funding, the members will provide mentorship and access to networks. The firms also intend to use the alliance to assist their portfolio companies in entering the Indian market.
“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,” stated Arun Kumar, managing partner at Celesta Capital and the first chair of the alliance, during an interview.
The geopolitical state of affairs remains as intricate as ever. In February, D. Trump and N. Modi initiated the TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative aimed at deepening technology collaboration between the U.S. and India. However, these relations soured rapidly when Trump, in the last month, slapped a 50% tariff on Indian goods as a reaction to New Delhi’s constant purchase of Russian oil. This has been viewed as a unilateral move on the part of Trump and these analysts believe has placed the two leaders on the opposing side of an ever repetitive trade and diplomatic rift.
Dismissing the political tensions in between the leaders, the collaboration continues to perceive India as a center for startups working on strategic technologies like AI, semiconductors, space, quantum, robotics, bio, energy, and climate as well.
Sriram Viswanathan, the founding managing partner at Celesta Capital, noted that “We find India as a particularly interesting market, not just for the opportunities that exist for new companies that get started in India, but also for companies in the U.S. that are seeking to expand into the Indian market.”
After deliberations with various industry players and the Indian Government, Celesta Capital led the initiative being the first in India track to support Agnikul and other space related startups, IdeaForge, also drones, and OneCell Diagnostics which uses AI for cancer diagnosis.
Viswanathan stated, “We have put this thing together to actually energize the ecosystem and bring like-minded investors together.”
The focus of the initiative will be on early-stage startups, covering funding from seed to Series B rounds, while deliberately steering clear of investments in more mature companies, as noted by Viswanathan. He also mentioned that the initial billion-dollar investment is just the beginning, affirming that “every significant journey starts with a first step.”
“You could expect more firms to join this alliance, both financial VC firms and private equity firms,” he added. “You should also expect corporates to join who have pretty significant investment programs.”
While the alliance does not specify precise eligibility criteria for new members, Viswanathan remarked that participants are required to adhere to the Indian government’s regulations under the RDI scheme, which emphasizes investments in “sunrise” sectors, support for India-based startups, and securing local regulatory approvals.
Viswanathan mentioned, “The alliance is just a platform for engaging with the government.”
As a group, the investors in the initiative plan to collaborate with the Indian government on policies and incentives to advance the interests of the private sector and present a cohesive front, he added.
In the past, regulatory shifts introduced without consulting the industry have led to turmoil in India. Some of these adjustments encountered intense criticism from U.S. investors and were subsequently withdrawn after considerable public dissent.
The companies involved claim that the alliance members will freely share information as well as collaborate on the development of pipelines, due diligence, and co-investment activities.
The initial members of an advisory board that will help define common goals and foster joint activities while allowing each fund to keep its autonomy will include members from Accel, Premji Invest, and Venture Catalysts.
In the words of Kumar, he will be the first to hold the position of chair but as the alliance develops, that will change as will the other positions of leaders.
This alliance could serve as both a benefit and a risk for Indian deep-tech startups. Although consolidating long-term investments and providing a unified voice to the government appears beneficial, there is a potential downside if coordination fails, which could leave promising firms in uncertainty.
Anand Daniel, a partner at Accel, expressed in a prepared statement, “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.”
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