In a recent fireside chat, Shyam Menon, partner and co-founder of Bharat Innovation Fund, discussed the outlook of deep tech investment in India. Menon, a material scientist by training, has a rich background in startups, venture capital, and disruptive technology. He launched India’s first climate tech-focused seed fund, Infuse Ventures, in 2012 and later established Bharat Innovation Fund, India’s first deep tech-focused pre-series A and Series A fund, in 2018.

Menon shared his insights on the evolution of deep tech investment, noting that it takes a decade or two for technologies to become mass-market scale. He also highlighted that India’s strengths lie primarily in software, with many startups focusing on machine learning, Internet of Things (IoT), and AI. Menon emphasized the importance of strong IP-led innovation in the deep tech sector.

Discussing the challenges of venture capital in hardware tech, Menon pointed out that the handoff points for investment are not as visible as in biotech or software. He also highlighted the importance of having a clear handoff mechanism in place for long-term investments.

Menon also shared his perspective on the growth of the Indian tech ecosystem. He noted that many founders are individuals who have experienced problems within the enterprise sector and are now building solutions to address these issues. He also mentioned the emergence of cutting-edge deep tech startups from academia, particularly in the field of quantum computing.

When asked about the fundraising process for Bharat Innovation Fund, Menon explained that the fund’s uniqueness lies in its knowledge of the market and its early identification of new opportunities. He also mentioned that the fund is currently in the process of launching its second fund, with a target of $150 million and a green shoe option of an additional $50 million.

Menon concluded the chat by expressing his hope for Bharat Innovation Fund to become a deep tech venture fund platform of repute that continues to push out good deep tech companies from India into the world.

Timestamps:

00:09: Introduction
01:38: Transition to India and Fund Launch
04:12: Challenges of Deep Tech Investment
07:07: Validation and Risk Assessment
09:39: Access to Information and Ecosystem
11:35: Ecosystem Players and Startup Origins
13:52: Uniqueness of Bharat Innovation Fund
17:55: Pitching to Potential LPs
22:51: Investor Selection and Fundraising Challenges
24:49: Expectations from Investors
26:57: Fundraising Target and Market Analysis
27:28: Ambitious Fundraising and Market Feasibility
31:11: Ceiling for Fund Size and Exit Opportunities
32:48: Overview of Venture Capital Funds in India
34:50: Evolution of the Ecosystem