India-focused venture capital firm AUM Ventures has announced the launch of its second fund, the AUM Ventures India Innovation Fund II, with a target corpus of Rs 750 crore (approximately $80 million). This initiative is set to bolster early-stage deeptech startups in sectors like space technology, semiconductors, artificial intelligence, and defence technology. The move underscores a growing trend of increased investment in India’s burgeoning deeptech landscape, driven by both private and public sector enthusiasm.
### AUM Ventures and Its Strategic Focus
AUM Ventures, founded in 2022, has quickly established itself as a key player in the Indian venture capital space, particularly in deeptech. The newly launched fund is a SEBI-registered Category II alternative investment fund, with plans to invest in 25 to 30 companies over a five-year period. The firm aims to support Indian founders developing intellectual property-driven, innovation-led companies with global competitiveness.
The investment strategy involves initial funding between $750,000 and $2 million, with provisions for follow-on investments through Series A and Series B rounds. Nisha Shah, a general partner at AUM Ventures, will spearhead investments from this new fund. Shah’s previous role as the chief operating officer at Narotam Sekhsaria Family Office adds a wealth of strategic expertise to the table.
### Context and Competitive Landscape
The launch of AUM Ventures’ second fund comes at a time when India’s deeptech sector is witnessing significant traction from investors. Other venture capital entities such as Fundamentum Frontier Advisors, Piper Serica’s Bharat Tech Fund, and Shastra VC have also launched funds dedicated to early-stage deeptech investments. This competitive landscape highlights a broader trend of growing confidence in India’s deeptech potential.
Government initiatives have played a crucial role in fostering this environment. Recent policy changes have extended the Startup India recognition age limit for deeptech startups to 20 years and increased the turnover eligibility threshold to Rs 300 crore. Additionally, the government has launched substantial schemes like the Rs 1 lakh crore Research, Development and Innovation scheme and the next phase of the India Semiconductor Mission to bolster advanced technology sectors.
### Implications for India’s Startup Ecosystem
The focus on deeptech by AUM Ventures and its peers is indicative of a shifting paradigm in India’s startup ecosystem, where traditional tech sectors are increasingly complemented by more specialized, high-tech domains. In 2025, Indian deeptech startups attracted approximately $500 million across 87 deals, making it one of the most capital-rich sectors. This momentum continued into the first quarter of 2026, with $166 million in funding, demonstrating sustained investor interest.
For founders and engineers working in deeptech, the availability of new funds like AUM Ventures India Innovation Fund II provides not only financial backing but also strategic support to scale globally. This influx of capital and expertise could accelerate the pace of innovation and commercialization of cutting-edge technologies in India.
As the fund gears up for its first close in July 2026, stakeholders in India’s startup ecosystem will be keenly observing its investment choices and the subsequent impact on the deeptech landscape. The success of this fund could set a precedent for further investments in high-tech sectors, potentially transforming India’s position in the global deeptech market. For investors, the evolving regulatory environment and increasing government support signal an opportune moment to engage with the Indian deeptech sector.
