Question: For a DeepTech startup, what constitutes a viable MVP for investors, given the long research and development cycles?

The Indian DeepTech ecosystem is witnessing an unprecedented surge, transforming the nation from an outsourcing hub to a vibrant center of technological innovation. With funding in DeepTech companies in India seeing a significant 70.5% rise in 2025 compared to 2024, and total funding exceeding $8.89 billion in the last decade, investor interest is clearly on the rise. This growth is fueled by supportive government policies, advancements in AI, and a burgeoning talent pool. However, DeepTech startups face a unique challenge: the inherent long research and development (R&D) cycles, often requiring 5-8 years to reach revenue compared to 1-3 years for conventional startups. This extended gestation period necessitates a different approach to the Minimum Viable Product (MVP) for investor readiness.

The DeepTech Dilemma: Long R&D Cycles and Investor Patience

Unlike traditional software startups that can rapidly iterate on user interfaces, DeepTech ventures deal with fundamental scientific and engineering challenges. This translates into high R&D costs, complex technical risks, and a slower path to profitability. Indian founders and investors alike acknowledge the need for patient capital, as revenue often comes after years of intensive R&D. This is why the definition and expectation of an MVP in DeepTech diverge significantly from other sectors.

What is a "Viable MVP" for DeepTech?

For DeepTech, an MVP goes beyond a basic functional product; it serves as a critical demonstration of feasibility and potential.

• Proof of Concept for Core Technology: A DeepTech MVP primarily acts as a robust proof of concept, providing tangible evidence that the underlying technology is viable and works as intended. This might involve showcasing a fundamental scientific breakthrough or a critical component's functionality, rather than a fully packaged end-user solution. For instance, a quantum computing startup might use an MVP to demonstrate its cloud services, allowing potential users and investors to experience the technology's power without significant hardware investment.
• Risk Mitigation and Validation: In a high-stakes environment where failure costs can be enormous, the MVP approach helps mitigate risks by allowing startups to test critical hypotheses early on. Whether it's the scalability of a new AI algorithm or the efficacy of a novel drug delivery system, an MVP provides valuable insights into the technology's strengths and weaknesses. It enables iterative development, allowing for flexibility to err and improve.
• Early Customer Feedback and Market Potential: A viable DeepTech MVP should also demonstrate early customer or user engagement and prove potential market fit. This could be through pilot programs with leading institutes, beta registrations, or securing paid pilots, even if the product isn't fully commercialized. It shows investors that there is a demand for the product and that the team can execute their vision. The National Deep Tech Startup Policy (NDTSP) even encourages a user-led collaborative R&D model for MVPs with an assurance of Minimum Order Quantity (MOQ) procurement to enable iterative development and adoption.

Investor's Lens: What VCs Look For

Investors in DeepTech understand the unique timelines and risks involved. They are increasingly tailoring their strategies to this segment, which demands time and patience but promises high-value innovation.

• Technical Expertise and Team: Given the complexity, investors place immense value on the technical expertise and experience of the founding team. They need to be convinced that the team possesses the capability to build the ambitious technology envisioned.
• Clear Problem Statement and Solution: Even with groundbreaking technology, investors look for a clear articulation of the problem being solved and how the DeepTech solution uniquely addresses it. The solution should be IP-led and have the potential to disrupt industries or create new markets.
• Scalability and Intellectual Property (IP): Investors seek technologies with strong intellectual property (IP) and clear pathways to scale globally. While India's domestic market is growing, some investors emphasize that the product must be globally acceptable for the company to achieve significant scale. Building resilient IP creation is seen as crucial for India's DeepTech model.
• Path to Commercialization: Although R&D cycles are long, investors want to see a credible plan for commercialization and eventual market adoption. This includes understanding the target market, potential revenue streams, and strategies for moving from "lab-to-market".

Navigating the Funding Landscape: Role of Patient Capital and Government Support

The Indian DeepTech funding landscape is maturing, with specialized VCs and government initiatives playing a crucial role. Funds like pi Ventures, Bharat Innovation Fund, Exfinity Ventures, Speciale Invest, YourNest Venture Capital, and Yali Capital are specifically focused on DeepTech. These investors are prepared to invest with patience and a deep understanding of DeepTech innovation cycles.

Moreover, the Indian government is actively supporting the sector. The recent ₹10,000 crore Fund of Funds aims to channel long-term capital into early-stage DeepTech ventures, administered by SIDBI. This initiative, along with the Research, Development and Innovation (RDI) scheme with a corpus of ₹1 trillion, signals a significant push to boost R&D and attract long-term capital, acknowledging the longer gestation periods and complex technical risks of DeepTech.

Key Takeaways for DeepTech Founders

• Focus on Core Validation: Your MVP should unequivocally prove the feasibility and unique capabilities of your core technology. This is your primary deliverable to investors.
• Build a Strong Technical Foundation: Highlight your team's deep technical expertise and experience. This builds investor confidence that you can navigate the complex R&D journey.
• Define Your Problem and Market: Clearly articulate the significant problem your DeepTech solution addresses and demonstrate a potential market fit, even with early pilots or beta users.
• Plan for the Long Haul: Be realistic about R&D timelines and articulate a clear, though potentially longer, path to commercialization and profitability. Investors in DeepTech are looking for patient capital opportunities.
• Leverage Ecosystem Support: Explore specialized DeepTech VCs and government grants or policy benefits (like the NDTSP's MOQ assurance) designed to support long R&D cycles.

By strategically developing an MVP that showcases technological viability, mitigates risk, and demonstrates early market interest, DeepTech startups in India can effectively bridge the gap between groundbreaking innovation and investor confidence, paving the way for future growth and impact.

TAGS: DeepTech, MVP, India, Venture Capital, Startup Funding

Tags: DeepTech MVP India Venture Capital Startup Funding