The Art Of A Good Unicorn | No better time to be a DeepTech entrepreneur

Going beyond basic ideas and prototypes, DeepTech startups have to be developed to the point where they are functional with a clear path to commercialisation

So, India is said to have close to 4000 DeepTech startups and out of these startups, it's said that about 500 of them were established just in 2023. And while that shows a surge in the number of DeepTech startups, a report outlines that they raised only $850 million in 2023, which was said to be close to an 80% decline, compared to $3.7 billion raised in 2022.

How can DeepTech startups be bolstered? Even if there's raw talent, what happens when the rubber hits the road? (HT File)

What's going on? Because it seems that India has seen the potential of DeepTech. Is it the advent of generative AI? Is it leveraging India's large pool of engineers? On top of those aspects, in 2023, the governments of India and the US came together to sign a pact to strengthen their DeepTech ecosystems. So, the interest is there. But, where does it go from here?

How can DeepTech startups be bolstered? Even if there's raw talent, what happens when the rubber hits the road? How can an idea that may be brilliant in theory become market-ready? Just like how India and the US came together, are more partnerships and collaborations required to accelerate the DeepTech ecosystem in India?

Maybe, DeepTech startups could look at organisations, which are looking to take them to the next level.

According to Kiran Shesh, CEO of the TIH Foundation for IoT and IoE (TIH-IoT) at IIT-Bombay, "We are in the business of supporting technology development in the value of depth phase, which is from TRL (Technology Readiness Level) 4 to TRL 7. Our job is to find out the right technologies that would have a high impact for India and identify technologies that can be commercialised & that can result in products that can be deployed.”

“Once we invest in a startup, we could help them grow by giving them business, finding them customers and helping identify a potential VC, so they can go from seed support to Series A funding along with fellowships and training programmes. We, also, work in a manner where students, startups, academia and industry can come together and create magic in the technology vertical of IoT... We don't want to develop technology that ends up as a publication sitting in a library, so it's impact-oriented activity,” Shesh said.

So, someone in the early TRL phases may focus on building a strong prototype and validating the technology. Someone in the later TRL phase may focus on refining the product, addressing technical challenges and looking at how to commercialise.

Shesh remarked: "Corporates have the option of setting up a large R&D team within the organization and have them work on new products or improve existing products. There's, always, a make-or-buy decision for the corporate whether they should have something in-house or tie up with academia where the research is on the frontier of technology. So, we become the extended arm for technology development".

"As a national hub, we have access to faculties across IITs and even NITs, so we create a project team comprising a consortium comprising faculty from different institutes. This may not have been possible earlier, because everybody worked in siloes," Shesh said.

For DeepTech entrepreneurs, there may be an allure in purely theoretical research. There could be a stronger focus on solving real-world problems and tailoring innovation to deal with them. Going beyond basic ideas and prototypes, the technology has to be developed to the point where it's demonstrably functional and has a clear path to commercialisation. An incubator or a technology development hub could offer a wealth of resources, like funding, BD and network access, which could help refine one's business model and scaling strategies.

And there's no time like the present to get this started.

Shesh said: "When it comes to India's startup ecosystem, for anyone in the age group of 20-30, there's no better time than now if one wants to become an entrepreneur and fall, because there's an ecosystem of cushioning that prevents someone from getting hurt. There's support in terms of funding and talent. If someone creates technology but jobs are not created, then nothing really may be getting solved. And if startups fail, the founder becomes better and learns & becomes a good mentor telling an incubatee or startup what not to do. Twenty or 30 years ago, because of the social structure, entrepreneurship was never promoted and now, it is much more open. And there's no dearth of money for good ideas".

And while entrepreneurship has become a dinner table conversation in the middle class, maybe due to Shark Tank India, there's, also, a unicorn obsession pushing people to go places they do not want to go. So, there's a level of over-romanticism that ought to be constrained, especially for something as burgeoning as DeepTech.

As a Chevening alumna who briefly studied in London, I saw how UPI was seen as the cynosure of all eyes. I, also, saw how London was really invested in an innovation programme where academia and corporates came together, especially in the FinTech space in a sandbox setting. Could India have that kind of deep R&D support? Or is it already here? Collaboration certainly lightens the burden.

"IoT and IoE are going to be huge going forward. Everything will be connected with a person being able to operate their house, car and phone. There would be trillions of IoT devices controlling people's lives and the world," said Shesh.

Shrija Agrawal is a business journalist. The views expressed are personal