Among the steps proposed is setting up of a dedicated ‘deep tech capital guidance’ fund in which the government, private limited partners and foreign investors anchor certain commitments to a new fund or an existing fund in the form of fund of fund (FoF) structure.
In establishing the FoF, the policy has proposed, the mother fund should have the ability to focus daughter fund investments on higher risk deep tech startups.
“Certain fiscal incentives such as tax rebates can be explored to attract domestic general partners and limited partners from the investor community (venture capitalists/angel funds) if they allocate a certain percentage of their corpus to deep tech startups,” it added.
According to an official statement, the draft policy has been developed following consultations with over 200 stakeholders. “This policy complements and adds value to the existing Startup India policies, programmes and initiatives, by fostering a conducive ecosystem for deep tech startups to thrive and address their unique and complex challenges,” it added.
The draft policy document pointed out that deep tech startups, which are focused on frontier technologies and digitalisation, encounter specific challenges in sustaining growth and overcoming the valley of death (VoD). The VoD refers to a critical period in a startup’s life cycle when it needs to secure significant funding to grow, but risks failure due to a lack of resources or revenue.
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It has suggested steps to enable startups in the space to overcome the VoD. These include the development of funding programmes based on the ‘failing by design’ concept that would help startups in pivoting and adjusting strategies to evolve during the early stages.The draft policy, for which stakeholder comments have been sought till September 15, has considered 10 sub-sectors in the deep tech ecosystem. These include segments such as technology hardware such as 3D printing and semiconductor manufacturing; enterprise software; artificial intelligence; internet of things; robotics and security solutions.
The drafting process involved multiple priority-setting meetings at the National Consortium and working group level, consultative workshops with deep tech startups in Bengaluru, Hyderabad, Mumbai and New Delhi, the statement said.
Discussions were anchored at academic innovation and incubation centres, multi-stakeholder roundtables and debates, focused group discussions with subject matter experts and technology policy researchers and interviews with individual thought leaders, it added.
The National Consortium, chaired by the principal scientific advisor, comprised stakeholders such as government officials and industry representatives. A working group was also set up to propose a comprehensive policy framework to address the needs and strengthen the Indian deep tech startup ecosystem.
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