A cluster of fund launches in April and May 2026 signals renewed investor conviction in India’s deeptech and startup ecosystem, with deeptech leading the charge.
In the third week of May, Mumbai-based Piper Serica launched the Bharat Tech Fund — a ₹800 crore Category II AIF targeting Series A and B startups in semiconductors, artificial intelligence, spacetech, defence technology, biosciences, and fintech infrastructure. Average cheques will run ₹25–50 crore.
The fund’s advisory board includes S. Christopher, former chairman of the Defence Research and Development Organisation. Piper Serica says it sources deals directly through IITs, IISc, iDEX, IN-SPACe, and DRDO.
Days later, Bengaluru-based Shastra VC (formerly Veda VC) announced Fund III at $100 million. The firm writes cheques of $500,000 to $3 million into pre-seed and seed-stage companies across AI, climate tech, spacetech, defence, and renewable sciences.
Led by Vasant Rao, Avijeet Alagathi, and Ashis Nayak, Shastra has deployed nearly $55 million across two prior funds. Its portfolio includes Simplismart, Alt Carbon, Sisir Radar, and Avammune.
Government puts weight behind it
On April 13, DPIIT formally notified the Startup India Fund of Funds 2.0 — a ₹10,000 crore scheme implemented through SIDBI and channelled via SEBI-registered AIFs.
Its predecessor committed ₹10,000 crore to 145 AIFs, which invested over ₹25,500 crore across more than 1,370 startups. FoF 2.0 narrows the focus: priority segments are deeptech, technology-driven innovative manufacturing, and early-growth stage startups backed by smaller fund managers.
The scheme spans two Finance Commission cycles, signalling that the government intends it as a permanent structural feature of India’s venture capital landscape rather than a time-limited intervention.
Established names follow
The most high-profile private launch of the season is Mettle Capital. Three former Peak XV Partners managing directors — Ashish Agrawal, Ishaan Mittal, and Tejeshwi Sharma — are targeting $350–400 million for a debut fund, with a first close expected before September.
Agrawal backed Groww early, generating a reported 94x return. Mittal’s bets include Razorpay and Mamaearth. Sharma led investments in CRED, Atlan, and Whatfix.
The fund plans 5–6 investments per year, focused on Series A and B, with selective seed participation.
The numbers behind the wave
The launches come against a backdrop of sharply accelerating fund formation. According to Bain & Company’s India Venture Capital Report 2026, India-focused fund-raising doubled year-on-year in 2025, reaching $5.4 billion. Maiden fund launches tripled — 45 in 2025 versus 15 in 2024. Average fund size rose more than 35%, from roughly $50 million to $68 million.
India’s VC and growth equity market reached approximately $16 billion in 2025, its second consecutive year of growth, even as broader private equity activity in India declined roughly 18% year-on-year.
Thematic focus, the report notes, has sharpened sharply with deeptech, AI, climate, and spacetech emerging as dominant themes across both new and existing funds.
