Bengaluru-based venture capital firm Shastra VC has announced the launch of its third fund, a $100 million (approximately ₹963 crore) corpus aimed at supporting early-stage startups in deeptech, artificial intelligence, and climate sciences sectors. This move highlights the growing interest in India’s deeptech ecosystem, a sector that is rapidly gaining traction due to technological advancements and supportive government policies. Shastra VC plans to invest between $500,000 to $3 million in intellectual property-led startups, focusing on space and defense technologies, AI, and renewable sciences. The fund targets startups from seed stage to Series A and beyond.
### Shastra VC’s Strategic Vision
Founded in 2022 by former operators Vasant Rao, Avijeet Alagathi, and Ashis Nayak, Shastra VC has quickly established itself as a significant player in India’s venture capital landscape. With approximately $55 million deployed across its first two funds, Shastra VC has invested in 30 startups and facilitated over $80 million in follow-on capital. Their portfolio includes notable names such as Alt Carbon, Simplismart, Sisir Radar, Avammune, and Sanlayan. The founders bring a wealth of experience from their previous ventures, with Rao and Nayak cofounding Autoninja, acquired by ICICI Lombard, and Alagathi founding BYG, acquired by Curefit. Shastra VC is further strengthened by its advisory network, which includes industry veterans like former Tech Mahindra CEO CP Gurnani and former Kotak executive C Jayaram.
### Rising Investor Interest in Deeptech
The timing of Shastra VC’s new fund aligns with a broader trend of increasing investor interest in India’s deeptech sector. This interest is driven by a combination of factors, including advancements in AI, semiconductors, spacetech, and robotics, along with supportive government policies. Similar initiatives are evident in the recent launch of the Bharat Tech Fund by Piper Serica, a ₹600 crore fund with a ₹200 crore greenshoe option, and Celesta Capital’s planned ₹2,000 crore India-focused deeptech fund. Additionally, government incentives such as extended Startup India benefits, increased turnover eligibility thresholds, and tax benefits are creating a conducive environment for deeptech innovation.
### Impact on India’s Startup Ecosystem
Shastra VC’s commitment to deeptech startups is expected to bolster the innovation landscape in India, particularly in sectors that require substantial research and development. The government’s Startup India FoF scheme, with its ₹10,000 crore corpus, has expanded to support alternative investment funds investing in startups with longer R&D cycles and higher capital requirements. These developments are crucial for nurturing a robust ecosystem that can compete on a global scale. The increased focus on deeptech in the Union Budgets and extended policy support underscores the strategic importance of this sector for India’s technological growth.
The launch of Shastra VC’s new fund is a promising development for India’s startup ecosystem, particularly for founders in the deeptech space. As competition intensifies and more funds are directed towards deeptech, founders and engineers in this domain should anticipate increased opportunities for innovation and collaboration. Investors, on the other hand, should watch for emerging trends in AI and renewable sciences, as these areas are poised for significant growth in the coming years.
