India’s Startup Shift: VCs Dive into Deeptech as Ecosystem Evolves, Says Zerodha’s Nithin Kamath

Image Source: Economic Times

Zerodha CEO Nithin Kamath says India’s startup ecosystem is maturing, prompting venture capitalists to pivot from easy bets like fintech and e-commerce to complex deeptech ventures. As exits improve and valuations peak, investors are prioritizing innovation, profitability, and long-term impact—ushering in a new era of frontier technologies.

From Fintech to Frontier: Deeptech Becomes India’s New VC Darling

India’s startup landscape is undergoing a strategic transformation, according to Zerodha co-founder and CEO Nithin Kamath, who recently shared insights on social media about the evolving venture capital (VC) trends. As the ecosystem matures, VCs are shifting focus from consumer-centric models to deeptech startups, which offer more complex and transformative solutions.

Kamath’s reflections come amid a backdrop of record-high valuations, strong exit performance, and a growing appetite for innovation-driven investments.

Key Highlights from Kamath’s Commentary:

Deeptech Takes Center Stage

Kamath noted that “easy opportunities are largely gone now,” referring to the saturation in fintech and e-commerce.

VCs are now backing startups in deeptech domains like AI infrastructure, semiconductors, robotics, and space tech, where returns require longer gestation but higher impact.

India’s VC Ecosystem Matures

Kamath recalled how, in 2010, VC was an “exotic term,” with most startups funded by family or friends.

Today, India boasts a robust funding infrastructure, global investor interest, and entrepreneurial ambition across sectors.

Valuations and Exits Hit Highs

Despite a slowdown in VC investments in Q3 2025, India saw strong exit performance, with seven-year-high valuations.

Investors are now prioritizing profitability and cash flow over growth-at-any-cost models.

Why Deeptech Now?

Deeptech startups are seen as moats against competition, offering unique IP and defensible business models.

Kamath emphasized that to earn VC-like returns today, founders must “do something truly special.”

Supporting Infrastructure

Institutions like IIT Madras have launched over 100 deeptech startups in the past year, supported by patent filings and government incentives.

This shift signals a new chapter for Indian entrepreneurship, where long-term innovation and technical depth are becoming the cornerstones of venture capital strategy.

Sources: Economic Times, Republic World

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