Neosapien CEO Dhananjay Yadav has ignited a debate over why startup funding in India keeps favouring consumer-facing apps over deeptech ventures — warning that the bias could stall the country's transition into a high-value technology hub.
Investors, Yadav argues, prefer the quick exit potential of consumer platforms, often sidelining long-term R&D. Venture funds typically seek exits in five to seven years — a timeline that suits digital platforms that scale quickly across a vast user base. Deeptech ventures in AI, robotics and advanced engineering, by contrast, need years of research, sometimes a decade, to move from prototype to product.
The consumer-app math vs deeptech fundamentals
Consumer startups often spend heavily on customer acquisition — a cash drain, but one that produces immediate, visible metrics for investors. Deeptech companies frequently show stronger underlying fundamentals, such as higher revenue-per-employee and lower operational waste, yet stay underserved because their path to profit is not immediate.
The concern: if capital keeps flowing into replicating existing app models, homegrown intellectual property — new materials, hardware, advanced automation — takes a backseat, keeping India reliant on global technological imports.
Who can bridge the patient-capital gap
The debate's proposed fix: India's established business houses and corporate venture arms, with longer investment horizons, are better suited to supply the patient capital that standard funds find too slow. Signals to watch: government policy shifts, the rise of dedicated deeptech funds, and interest from long-term institutional players.
Why it matters for founders
Deeptech founders should stop pitching VCs with consumer-style growth decks. Lead with IP, R&D milestones and revenue-per-employee — and target dedicated deeptech funds and corporate venture arms, where patient capital actually lives.