“It was obvious they weren’t theorizing. They understood propulsion because they had lived it, tested it, failed, and learned in real labs,” said managing partner Anirudh Damani. Back then, the venture capital firm wrote a small cheque in a $3 million seed round.
Five years on, that technical depth has become a magnet for investors. Artha returned for Agnikul’s Series B this April with about $3 million. More recently, in November, the startup raised another $17 million at a $500 million valuation, backed by Artha and other investors like Advenza Global Ltd, HDFC Bank, and 100X.VC, among others.
“Our association with IIT Madras gave early backers confidence and a solid ecosystem,” co-founder and CEO Srinath Ravichandran, told Mint.
Artha is not alone. Indian venture capital firms are increasingly putting their money behind founders with deep domain expertise, PhD-level research credentials, and IIT lab spinoffs, rather than the traditional execution-first archetype.
Apart from Agnikul, Artha this year backed semiconductor startup Calligo Technologies and AI-backed Low Earth Orbit (LEO) satellite infrastructure company TakeMe2Space, both of which are run by engineering-heavy teams.
Similarly, Avaana Capital has invested in research-led companies, including Greengrahi, Dreamfly, BacAlt, Tsuyo, and Enlite. Fundamentum has leaned into IP-led plays with a $50 million funding round with Geniemode in February.
This marks a departure from 2014 to 2022, when India’s leading startups were mostly built by execution-led founders rather than researchers.
Companies like Flipkart, Snapdeal, Ola, Zomato, Cred, Swiggy, and several D2C brands were founded by operators with business or engineering backgrounds—not PhDs or research-heavy teams.
Why investors are changing focus
Experts told Mint that the new cohort of founders is emerging, driven by rising AI and deep-tech investments in India, a shift in the kinds of problems startups are tackling, and a growing number of ventures emerging directly from research labs.
Rising defence spending, India’s attempt to position itself as a trusted low-cost innovation hub outside of China, and the government’s push for manufacturing have accelerated deeptech investments, with a 2025 RedSeer report projecting a $ 30 billion sector by 2030.
Ashish Kumar, co-founder and partner at Fundamentum Partnership, said that IP and research capabilities are becoming core differentiators as distribution platforms expand and launch competing products more quickly.
“To counter this, product companies need to build barriers to entry, and it usually comes with some IP. This is where research comes into play, and we look for this in the team and their research infrastructure or labs,” he said.
Fundamentum’s recent investment in Geniemode was driven by the startup’s proprietary GenAI design technology, Kumar said.
He added that the fund is backing another startup purely for its materials innovation. “Our core thesis in these B2B Commerce 2.0 companies is their ability to win market share and margins because of this technical capability,” he said.
Artha’s Damani believes that the nature of the problems Indian founders are choosing to solve is also changing. “We are moving from a decade of distribution-led consumer tech to a decade of research-led and infrastructure-led opportunities,” Damani added.
Beyond AI, this pattern is most visible in space technology, materials science, electric vehicle (EV) systems, industrial automation, and climate technology—sectors where products cannot be built without deep engineering or research-led inputs.
Avaana Capital, which invests in climate-tech and deep-tech ventures, said the new pipeline includes more founders emerging directly from research groups.
“We are seeing a lot more spinouts from premier research organisations, and that’s a great thing for the industry,” said Anjali Bansal, founding partner and investor at Avaana. Spinouts are private firms founded on academic research, with the aim of securing investment and commercialising the research.
Many of these, she said, come with patents, specialised engineering talent, and practical lab experience.
A July 2025 Nasscom report said that professors are increasingly turning lab work into scalable businesses, often with institutional incubation support. There has been a consistent 20–30% annual rise in startups founded by professors from IISc, IITs, IIITs, and BITS Pilani.
Risks remain
Investors also acknowledge potential pitfalls. Founders with purely technical backgrounds can struggle with sales or customer discovery.
“There will be monetisation and revenue risks in case of weak GTM (go to market) understanding,” said Kumar.
Vardhan Dharnidharka, principal at Stellaris Venture Partners, echoed the concern. “This can become a fatal flaw when building a business,” said Dharnidharka, adding that the best teams combine “deep tech and strong business chops.”
“A common challenge for technical founders is that most of them start by building complex technology and then look for a market to apply it to. That approach often leads to products that are technologically impressive but commercially misaligned,” said Ravichandran of Agnikul. “In our case, we began with a clear understanding of what the market needed and built with that goal.”
With more research-led founders entering the fray, investors say the ideal founding teams for today’s tech firms will pair deep technical expertise with strong business execution at the leadership level.
Despite challenges, most investors agree the shift is durable. “I think we have just gotten started. This wave will become stronger in the coming decade,” said Kumar of Fundamentum.
Avaana’s Bansal expects the trend to deepen as more IIT- and IISc-linked research teams commercialise their work.
Key Takeaways
- Indian VCs are moving away from prioritizing generalist, execution-first founders and are now actively seeking teams with deep domain expertise, research credentials, and PhDs.
- The primary driver is the need for startups to build strong intellectual property (IP) and technical barriers to entry to counter rapid replication by large distribution platforms.
- This funding trend is most pronounced in deep-tech sectors like AI, space-tech, materials science, electrical vehicle systems, industrial automation, and climate-tech, which require fundamental research input.
- There is a significant and growing trend of startups spinning out directly from premier research institutions, often bringing patents and specialized lab experience.
- While technical excellence is key, investors acknowledge the risk of weak Go-to-Market strategy in purely technical teams, suggesting that the ideal team must pair deep technical expertise with strong business execution skills.
