India is poised for a tech leap

Similarly, when I served as the Chief Executive Officer of Aptina Imaging, I thought we should set up a design centre for complementary metal oxide semiconductor (CMOS) image sensors in India. Every one of my direct reports was against it. I went one level down, to the Director of Engineering in the U.K., who set up the design centre in India. I believed in the talent and the opportunities in India and took a potentially career-limiting bet on this conviction. The result actually turned out to be career-enhancing.

I mention these examples to show that India's potential as a market for successful deep tech businesses (in these cases, we were developing leading-edge hardware) is actually quite big, but its potential to scale has been held back by important constraints. Thankfully, many of these issues have improved substantially in recent years.

When we set up Celesta Capital, the deep tech venture firm I co-founded with my partners in 2013, we were looking at investments in India from Day One. At that time, few other investors were pursuing deep tech investments in India and it was difficult to find promising companies. One of the biggest challenges was the lack of a robust ecosystem of experienced tech entrepreneurs who had built consequential global businesses. Without this, we met a lot of founders who were not tackling big problems in those days.

We saw companies developing what I would call evolutionary rather than revolutionary products. If you look at the early days of start-up tech opportunities in India, they were predominately focused on software services to support companies in the U.S. and elsewhere. There was also a big focus on the Indian market. Things like electric two-wheelers, Fitbits, or smart cricket bats.

This has now changed significantly. You now see a more self-confident set of entrepreneurs in India who are tackling very big problems; not just big problems in India, but big global problems. I think that is one of the most exciting things I have seen recently.

A lot of this shift has been spurred along by companies such as Agnikul, GalaxEye, ideaForge, Tonbo Imaging and a few others that are emerging today. These relatively early pioneers in their various sectors are trying to develop products that solve big problems, not just in India, but around the world. These don't look like other companies anywhere else in the world.

In an entrepreneurial ecosystem, if you see some people tackling big problems and experiencing success, it is infectious. Most of these founders are young, aggressive, and exuberant, and they move forward with First Principles thinking.

Another dynamic that is working in India's favour is its rapid GDP growth and very large population. When you have rapid GDP growth of a very large population, the market opportunities are tremendous when combined with business-friendly policies. Over the last five to ten years, this has helped India attract a lot of attention from the investment community and major corporations.

In terms of economic demographics, India is a microcosm of other emerging and developing markets around the world. The problems faced within India that entrepreneurs are now trying to solve are big problems elsewhere, too. Medical care is a good example. In India, you see a lot of companies trying to bring high-quality medical capabilities to people who don't have access to care today. In the U.S. and Europe, by contrast, people are generally solving a convenience problem. How do you make medical care more convenient to those who already have access to it? Access to care and similar challenges require much more innovative technology solutions, and there are countless other countries around the world that also need those solutions. I am highly confident that you will start seeing some major global companies within this arena emerging out of India over the next decade or so.

Of course, there are still some challenges to overcome in order to expand India's deep tech sector. In some cases, entrepreneurs are young and smart technically, but inexperienced from a business perspective. India will need to expand its base of deep tech investors beyond the seed funds to include more investors who are both patient and also have the ability to mentor young entrepreneurs about business building. Unlike Silicon Valley, India does not yet have a deep bench of executives that you can recruit to help lead or mentor the founders.

India also needs to begin investing in more fundamental scientific and engineering-based research. Much more money needs to be put into universities to fund scientific discoveries, which can lead to first-of-its-kind breakthrough products. This also requires bridging the gap between university research and commercialisation, which can be difficult. Many of the technical universities are generating promising entrepreneurs today, but more investment and policy support should be considered here. Having come from the Caribbean, whose education system was also modelled after the British, similar to India, I understand systems built around creating scholarship but not businesses. If you're going to convert scientific research into business – which is such a powerful motor for a successful deep tech economy – you must have a different approach.

From a sector standpoint, in the short term, there are big opportunities in fabless semiconductor design. India has four decades' experience in this domain, the pool of expertise is large, and there are substantial government grants available for compelling ideas. The second big opportunity is in defence, where the large market can help India create many product companies. Beyond these, I believe India will lay a strong foundation in areas like space technology, drug discovery, genomics, smart manufacturing, and robotics.

India possesses all the core capabilities necessary to capitalise on this opportunity and mature into a leading deep tech nation. With its strong economy, deep bench of talent, and increasingly favourable position in the macroeconomic landscape, India has the potential to become a global hub for the creation of a new generation of deep tech companies. I am optimistic that India will play a vital role in the global deep tech ecosystem of the future.

See also:

Indian start-ups dive into deep tech phase
Fuel for take-off
Start-ups born on campuses
Bridging the academia-industry gap
Support systems for start-ups
Space start-ups get into a higher orbit
Outlook positive
Chipping in
The rise of quantum.in
Automated growth