In Short:
A venture capital fund focused on deep technology in defense and aerospace sectors is set to launch in India. The fund, spearheaded by former Ministry of Defence official Ajay Kumar, has exceeded its target amount. This fund aims to boost startups in the space sector and support defense forces and defense export market. The fund will focus on engineering-led startups working on technologies like AI, quantum computing, and blockchain.
VC Fund to Boost Research and Development in Defense and Aerospace Sectors
A venture capital (VC)-driven fund will be established in India to focus on boosting research and development, as well as intellectual property (IP) creation in the critical sectors of defense and aerospace, according to a statement by Ajay Kumar, former Secretary of the Ministry of Defence.
Kumar revealed at an industry conference that the fund, which remains undisclosed in terms of cash pool, has already surpassed its target amount within a short period.
Significance of the VC Fund
The VC fund will play a significant role in supporting startups within the defense and aerospace industries, addressing the need for increased capital and risk-taking in these sectors. This fund will also cater to defense forces directly and support the defense export market.
Furthermore, the fund is expected to bolster the space sector, which serves both civilian and defense customers, and is poised for significant growth in the future.
Opportunities in the Defense and Space Sectors
With a focus on deeptech startups, particularly those utilizing technologies like AI, ML, quantum computing, and semiconductors, the fund aims to tap into the increasing investor interest in innovative solutions.
Kumar highlighted the potential for Defense and Space startups to enter the IPO market in the coming years, providing further investment opportunities in these sectors.
Supporting Policies
The government is planning to introduce a national deeptech startup policy, including the establishment of a fund of funds to support companies operating in this space. The draft policy was released for public consultation in July 2023, indicating strong support for deeptech innovation.
US-based VC fund Celesta Capital has also shown interest in investing in Indian startups focusing on global market solutions, particularly in the space sector.
Celesta has previously invested in companies like ideaForge, Agnikul, and Tonbo Imaging, demonstrating its commitment to supporting innovative startups in the defense and aerospace industries.
