U.S. and Indian Venture Capitalists Collaborate to Establish Over $1B Fund for India’s Deep Tech Startups

A coalition of eight prominent venture capital and private equity firms from the U.S. and India, including notable investors such as Accel, Blume Ventures, Celesta Capital, and Premji Invest, has come together to back India’s deep tech startups. They have pledged over $1 billion over the next ten years to strengthen U.S.-India technology ties.

This coalition addresses ongoing funding challenges. In April, Indian Commerce Minister Piyush Goyal faced criticism for his remarks about local startups favoring food delivery over innovation, contrasting them unfavorably with their Chinese peers in a presentation titled “India vs. China: The Startup Reality Check.” Investors and founders highlighted the scarcity of funding for deep tech in India and argued that Goyal’s comments overlooked the commitment of local entrepreneurs. This new coalition aims to tackle these issues by channeling long-term private investments into deep tech ventures, which many entrepreneurs believe have been underfunded in India.

The initiative is significant because investors typically compete for deals rather than collaborating in a formally named coalition with binding commitments. While VCs often co-invest, most cross-border partnerships are informal, relying on individual fund strategies instead of coordinated capital groups.

Known as the India Deep Tech Investment Alliance, the coalition comprises Celesta Capital, Accel, Blume Ventures, Gaja Capital, Ideaspring Capital, Premji Invest, Tenacity Ventures, and Venture Catalysts, as detailed in their joint announcement this Tuesday. This launch coincides with the Indian government’s approval of a ₹1 trillion (approximately $11 billion) Research, Development, and Innovation (RDI) scheme unveiled in this year’s national budget to bolster deep tech R&D.

Each coalition member will commit private capital over a 5- to 10-year period to support deep tech startups based in India, the firms indicated. Currently, such companies are few in India, as many leading deep tech ventures founded by Indians are registered in the U.S. However, New Delhi has mandated that local incorporation is necessary to qualify for incentives under its new RDI scheme, which the coalition intends to utilize.

Beyond just funding, coalition members will provide mentorship and networking opportunities, leveraging the alliance to help their portfolio companies establish a presence in the Indian market.

“This aligns with the strategic objectives of both India and the U.S. at the governmental level, concentrating on critical and emerging technologies,” said Arun Kumar, managing partner at Celesta Capital and the alliance’s first chair, in an interview.

However, the geopolitical landscape is complicated. In February, President Donald Trump and Prime Minister Narendra Modi launched the TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative to deepen tech collaborations between the U.S. and India. Relations soured soon after when Trump imposed a 50% tariff on Indian goods over New Delhi’s ongoing purchases of Russian oil, placing the two leaders at odds in an escalating trade and geopolitical conflict.

Despite these tensions, the coalition — looking past the geopolitical divisions between the leaders — is hopeful about India’s potential to emerge as a leading hub for startups focused on essential technologies such as AI, semiconductors, space, quantum computing, robotics, biotech, energy, and climate tech.

“We consider India a particularly attractive market, both for the opportunities presented to new ventures based there and for U.S. companies seeking to enter the Indian market,” stated Sriram Vishwanathan, founding managing partner at Celesta Capital, to TechCrunch.

Celesta Capital, an early supporter of Indian startups like Agnikul (space tech), IdeaForge (drones), and OneCell Diagnostics (AI-based cancer diagnostics), spearheaded this initiative following discussions with industry stakeholders and the Indian government.

“We’ve formed this collaboration to energize the ecosystem and connect like-minded investors,” Vishwanathan added.

The coalition will focus on early-stage startups — from seed to Series B — while steering clear of late-stage investments, Vishwanathan noted. He emphasized that the billion-dollar-plus commitment is only the beginning, as “every major journey starts with a single step.”

“More firms are expected to join this alliance, including both financial VC firms and private equity firms,” he mentioned. “Corporate entities with significant investment programs are likely to be involved as well.”

Although the alliance does not set specific membership criteria, Vishwanathan indicated that new members must comply with the Indian government’s RDI scheme requirements — which include investing in “sunrise” sectors, backing Indian-domiciled startups, and obtaining local regulatory approvals.

“The alliance functions as a platform for engaging with the government,” he conveyed to TechCrunch.

As a collective, the alliance investors plan to engage with the Indian government regarding policies and incentives to support private industry objectives, operating as a unified voice, according to Vishwanathan.

Historically, policy changes initiated without industry input have caused disruption in India. Some of these alterations faced considerable backlash from U.S. investors and were later retracted after significant criticism.

The alliance members will voluntarily share information and coordinate on pipeline development, due diligence, and co-investment opportunities, the firms stated.

An advisory committee, including representatives from Accel, Premji Invest, and Venture Catalysts among the initial members, will help establish common objectives and ensure collaboration while honoring each fund’s independence.

Kumar indicated that while he serves as the inaugural chair, the leadership of the alliance will rotate as it progresses.

The coalition presents a double-edged sword for Indian deep tech startups. While pooling long-term capital and presenting a cohesive voice to the government carries benefits, there exists a risk of coordination failures, potentially leaving promising startups in precarious situations.

“Over the next decade, startups will emerge in India and deliver innovative solutions for the global market. The conditions are set: ambition, talent, policy intent, and patient capital,” commented Accel partner Anand Daniel in a prepared statement.