With a background spanning IISc in Bengaluru, MIT in the US, and multiple climate-tech startups, Pardeep is uniquely positioned at the intersection of technical research and real-world execution.

CRID India identifies itself as a think tank and implementation agency, focusing on “hard-to-abate” sectors in industry, and agriculture, where Pardeep points out that even though there exist well-understood technologies that are more energy efficient and therefore emission reducing, their adoption has not taken off, because of the initial costs involved, lack of awareness and so on.

In this episode, he discusses examples, such as heat pumps, which he says could be India's next big success story, comparable to solar energy, and details his team's work in building the nation's first industrial heat map.

More efficient motors of IE 4 or IE 5 (international energy efficiency) rating are another example, as is drip irrigation.

We also discuss CRID India’s aim of becoming a “systems integrator” for energy transition in the country, where solving for climate change requires aligning policy, finance, and stakeholder interests beyond just engineering.

Hi, wherever you’re reading this, I hope you’re doing well.

First, a few headlines that caught my attention, from the government’s Press Information Bureau.

Ultrafast organic anodes designed for next-generation rechargeable batteries

Union Minister Dr. Jitendra Singh Announces India’s First Engineering Biology Graduation Course to Build Future Biotechnology Workforce

Cabinet approves Semicon 2.0 – Government delivers on its commitment for a long-term policy support to Semiconductors in India

The Lede

Indian Railways gets its first hydrogen fuel cell powered train

The modernisation of Indian Railways has hitherto relied on continual expansion of overhead electrification of its vast broad-gauge network. The state-run network is now charting a more autonomous path toward decarbonization.

Prime Minister Narendra Modi flagged off the country’s first hydrogen fuel cell powered trainset, at Jind from where the train will make a 90 km journey to Sonipat, both towns in the northern Indian state of Haryana.

The fuel cell technology, using a proton-exchange electrolyser, generates electricity through an electrochemical reaction between hydrogen and atmospheric oxygen. The electricity is stored in lithium-ion batteries, which will power the train’s electric engine.

The project seeks to demonstrate that clean rail mobility can be achieved without relying entirely on an external power grid.

This new trainset (locomotives + trailer cars) revives the historical operational independence of steam and diesel locomotives — albeit with water vapour as its only by-product. Built using indigenous technology integrated by Medha Servo Drives and the Integral Coach Factory, the configuration features two driving power cars delivering 1,200 kW of power, pulling eight trailer coaches.

Capable of carrying roughly 2,600 passengers at design speeds of up to 110 kilometres per hour, the initiative marks a significant structural scaling up of a propulsion system that has hitherto been confined to much smaller regional deployments.

The deployment comes as rail operators worldwide face intensifying pressure to eliminate fossil fuels and meet strict national net-zero targets. While early adoption of hydrogen passenger trains has been concentrated in Europe—most notably in Germany — and via pilot programmes in China and Japan, these initiatives have generally been confined to modest two- or three-coach configurations.

India’s venture represents a bolder bet on the scale and commercial viability of high-capacity hydrogen transit, backed by the establishment of the country’s largest dedicated railway hydrogen refuelling facility at Jind to support continuous, regular operations.

“Most hydrogen passenger trains currently operating globally comprise only two or three coaches and are primarily deployed on short regional routes,” the Ministry of Railways noted in a press release yesterday. “In contrast, the Indian Railways trainset has been configured as a 10-coach passenger train with a capacity of around 2,600 passengers, demonstrating the scalability of hydrogen-powered rail transport for high-capacity passenger operations.”

Safety concerns, because of the highly combustible nature of hydrogen gas, and the steep infrastructure costs required to grow and sustain these trains are two important challenges.

To manage the safety risks inherent to handling a highly flammable, odourless gas, the network has implemented a multi-layered “defence in depth” safety system, certified by Germany’s TÜV SÜD. The ecosystem includes continuous leak detection, automatic fuel shut-offs, and specialised ventilation systems.

If the Jind–Sonipat trials prove commercially reliable, the railway ministry plans to expand the rollout to heritage lines such as the Kalka–Shimla route, marking a calculated transition from a novelty pilot to a core pillar of India’s broader National Green Hydrogen Mission.

If you missed the latest Conversations episode

Mredul’s experience-packed journey began at IIT Bombay, where he earned a BTech in electrical engineering, and an MTech in deep learning. While at the institute, he was also a member of the team that designed and launched Pratham, widely thought of as India’s first student-led satellite.

After a stint in strategy consulting, his tryst with Indian startups started not with deep tech but via a vital role at the fintech company Slice, where he played an important role in scaling the venture to unicorn valuation.

Mredul, who was already an angel investor, co-founded Riceberg Ventures with Ankit Anand, Lino Gandola, and Shubham Raj. The firm launched its flagship $20 million Riceberg Ventures Premier Fund I in early 2024 to back global pre-seed deep tech ventures. Even as they expand Riceberg into Silicon Valley, Mredul and Shubham have also kicked off their own entrepreneurial venture in the area of AI-led cybersecurity, with their startup Causal Security.

Causal Security offers an AI-based platform building autonomous “AI hackers” to surface and defend vulnerabilities in enterprise infrastructure. Join us as to get a glimpse into Mredul’s vision for India’s sovereign technical capabilities and his own evolution from operator to investor to investor-entrepreneur.

Chapters:
(03:21) Early engineering roots and the IIT Bombay student satellite project

(06:05) Transitioning from strategy consulting to the hyper-growth ride at Slice

(09:23) The inception of Riceberg Ventures and backing "obsessed" founders

(14:08) Navigating deep tech sectors from biotech to nuclear energy,

(16:40) Launching Causal Security to address global AI-led cyber threats

(25:27) Automating security reviews with context graphs and AI harnesses

(43:44) Scaling Riceberg Ventures into the United States market

(44:57) Developing sovereign technical capabilities for the India AI stack

Hi, wherever you are, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot. Here’s today’s Deep Tech Dispatch. Happy reading and listening.

The Lede

If you’re interested in India’s semiconductor products ecosystem, here’s some news for you today. It’s one milestone for one young company, but one more significant step in India’s efforts to move from being almost entirely reliant on imports in a trillion-dollar industry to building our own supply chain.

In the latest episode of Conversations, today

If you missed last week’s episode

Founder Spotlight

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech startups. Here’s wishing you a great rest of the day.

— Hari

For decades, India’s semiconductor industry resembled an architect designing villas for others while living in a rented flat. The country’s semiconductor engineers, who constitute approximately 20 percent (a widely accepted industry estimate) of the global chip-design workforce, have long generated intellectual property for foreign titans while India remained dependent on imports for its own consumption.

A new generation of chip design startups is now on the rise and their commercial trajectories, like that of Mindgrove Technologies, suggest the tenants are finally building their own estate. Sticking with Mindgrove for this piece, by securing high-volume integrations with local manufacturers, the IIT Madras-incubated venture is fast moving from lab to market.

Mindgrove has just announced a memorandum of understanding with Prama India, a leading domestic surveillance company, marking a transition from laboratory validation to real-world volume. Prama will integrate Mindgrove’s Vision SoC — a GHz-class processor funded under the government’s Design Linked Incentive (DLI) scheme — across its commercial security product line, according to a press release.

This represents an instance of an Indian fabless startup successfully navigating the “valley of death” between a prototype and a mass-market production line, targeting a segment where reliability and security are paramount. Fingers crossed that there will be more and in greater frequency.

Note for example, HrdWyr, backed by Ideaspring Capital, will soon ship a processor that domestic consumer electronics company boAt has already signed on to buy as an anchor customer.

India’s semiconductor startups are attempting to carve out a space for themselves in a global market that is projected to exceed $1.3 trillion this year, even as the industry fragments along geopolitical fault lines. Note the latest memory chip shortage and its repercussions.

 As a “Silicon Curtain” of export controls and supply-chain de-risking descends between Western powers and Chinese manufacturing hubs, major economies are racing to secure “trusted” digital infrastructure. India is positioning itself as a resilient third pole in this realignment, tapping the open-source RISC-V architecture to build sovereign hardware that is immune to unilateral licensing restrictions.

“For Indian fabless semiconductor companies, credibility is built when products leave the lab and enter sustained deployment. This engagement validates our Vision SoC as a production-ready platform capable of meeting performance, reliability, and scale requirements in real-world security systems,” Shashwath TR, Mindgrove’s co-founder and CEO said in the press release.

Mindgrove’s deal with Prama follows its commercial partnership with Pinetics, which focuses on integrating Mindgrove’s SoCs into a broader range of commercial applications, including biometric access control systems, smart locks, and camera solutions. By extending the now production-ready Secure IoT chip into specific modules and products, the collaboration aims to create a more complete, domestic electronics stack.

In 2025 Mindgrove also teamed up with Bosch Global Software Technologies (BGSW) in an agreement that saw the startup supplying chips and boards for field testing in automotive and industrial environments, winning a stamp of approval from a global heavyweight. This collaboration allowed Mindgrove to refine its software stack and prove its silicon’s reliability under the stringent safety standards of industrial automation.

“Our collaboration with  Mindgrove marks an important milestone in advancing indigenous semiconductor capabilities for next generation video security solutions,” Ashish P Dhakan, Managing Director and CEO, Prama India, said in the press release. “By combining Mindgrove’s semiconductor design expertise with Prama’s extensive experience in video security, product engineering, compliance, and large-scale deployments, we aim to develop world-class solutions that are secure, scalable, and globally competitive.”

Beyond technology development, this collaboration will help build strategic capabilities within India’s semiconductor ecosystem, foster innovation, strengthen supply-chain resilience, and support the Government of India’s Atmanirbhar Bharat vision in critical technology sectors, Dhakan notes.

This all could mean accelerated commercialisation for Mindgrove’s chips — it has two platforms currently, one for Secure IoT, and the other, the Vision SoC — and encouragement for the chip design company to lean into its product development plans. For India, this is another small, but important step forward in building a local semiconductor product ecosystem.

Related Post

After decades of bridging academia and industry at the IIT Madras Research Park, over the last two years, Professor Jhunjhunwala has been chairing this ambitious industry consortium-led initiative to transform India into a global “product nation.”

We dive into ITEL’s unique model of forming scientific consortiums and nurturing young “Ranchos” to solve India’s most infrastructure problems – such as the need for affordable and reliable rapid mass transport, for example. Eliminating waterlogging in our cities after rains and floods, and slashing chemical fertilizer dependency in agriculture are other examples.

Join us as Professor Jhunjhunwala, who turned 73 last week, explains why achieving true technological sovereignty requires 20 million entrepreneurs who view failure as a mere stepping stone to success, a critical badge of experience. Discover how ITEL is building the future of Indian innovation, one impossible challenge at a time.

Chapters

(01:19) The birth of ITEL and the vision for a product nation: Professor Jhunjhunwala discusses the founding of the Immersive Technology and Entrepreneurship Lab (ITEL) and its goal to transform India into a global leader in technology.

(05:48) Leveraging scientific consortiums and nurturing young “Ranchos”: The strategy for ITEL involves bringing together India's top scientists from across the country and providing intense mentorship to young, talented engineers.

(08:40) Solving impossible problems from urban transport to waterlogging: Professor Jhunjhunwala outlines the "impossible" challenges ITEL is tackling, including reducing long commutes to 20 minutes and freeing cities from waterlogging.

(17:33) Navigating the three layers of funding for deep tech: The conversation details the specific roles of grants, government funds, and venture capital in supporting high-risk, high-impact innovations.

(25:33) Why India needs 20 million entrepreneurs to achieve sovereignty: Drawing inspiration from Mahatma Gandhi, the Professor argues that true technological sovereignty requires a massive scale of grassroots entrepreneurship.

(36:36) Challenging large Indian conglomerates to lead global innovation: Professor Jhunjhunwala critiques the reliance of large companies on imported technology and urges them to acquire and scale Indian deep tech startups.

(38:58) Embracing failure as a critical component of learning and growth: Using the analogy of a child learning to walk, he explains why incubators must allow entrepreneurs the freedom to fail and fall in order to eventually succeed.

(45:25) The roots of service: how childhood values shape leadership: The Professor reflects on how his teachers and Hindi poetry instilled the desire to serve society rather than seeking fame or money.

Hi, wherever you are, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot. Here’s today’s Deep Tech Dispatch. Happy reading and listening.

The Lede

In yesterday’s episode of Conversations, I’m joined by Vinod Shankar, co-founder of Java Capital, a venture capital firm that has carved a unique niche by focusing on deep tech and climate technology. Vinod’s journey is as specialized as his investments, moving from writing assembly code for mobile processors to leading a fund that backs moonshots in aerospace, silicon photonics, and advanced manufacturing.

Vinod recently ignited a lively debate in the startup ecosystem with his provocative essay, titled “I Want India to Win. Just Not With My Money.” He argues that India’s path to becoming a developed nation is being hindered by “sedimented” wealth. For example, consider one data point he highlights: while India’s wealthiest 1 percent control some $11.6 trillion, nearly 60 percent of those assets are frozen in real estate and gold.

In other words, not funding the future, he says. He also critiques India’s largest corporations for being “structurally allergic” to R&D risk, noting that global giants such as NVIDIA outspend the entire Indian corporate sector in a single quarter.

In this conversation we also talk about Java Capital’s next fund, their third, targeting Rs. 400 crore with a first close coming up, their “stacking” investment strategy, and Vinod’s urgent call for India’s ultra rich investors to allocate 10 percent of their net worth to domestic deep tech to secure the future of the nation’s technological sovereignty.

If you missed last week’s episode

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech startups. Here’s wishing you a great rest of the day.

— Hari

Vinod recently ignited a lively debate in the startup ecosystem with his provocative essay, titled “I Want India to Win. Just Not With My Money.” He argues that India’s path to becoming a developed nation is being hindered by “sedimented” wealth. For example, consider one data point he highlights: while India’s wealthiest 1 percent control some $11.6 trillion, nearly 60 percent of those assets are frozen in real estate and gold.

In other words, not funding the future, he says. He also critiques India’s largest corporations for being “structurally allergic” to R&D risk, noting that global giants such as NVIDIA outspend the entire Indian corporate sector in a single quarter.

In this conversation we also talk about Java Capital’s next fund, their third, targeting Rs. 400 crore with a first close coming up, their “stacking” investment strategy, and Vinod’s urgent call for India’s ultra rich investors to allocate 10 percent of their net worth to domestic deep tech to secure the future of the nation’s technological sovereignty.

Chapters

(01:32) Introduction: Vinod Shankar and the “I Want India to Win” Essay

(04:01) The Evolution of Java Capital: From Generalist to Deep Tech Specialist

(06:56) A Unique Career Path: From Assembly Code to Venture Capital

(09:34) The “Stacking” Investment Model: Connecting Portfolio Dots

(13:06) Addressing the “Sediment” Wealth Problem in India

(18:37) The Corporate R&D Crisis and the Need for a Virtuous Cycle

(26:41) Sovereignty and the Funding Gap: Domestic vs. Foreign Capital

(43:24) Java Capital’s Fund III: Moonshots and the Future of Indian Innovation

Hi,

Wherever you’re reading this, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot.

The Lede

Indian scientists develop an electrolyte additive to improve commercial viability of zinc-ion batteries

Indian researchers have reported an electrolyte additive that could make aqueous zinc-ion batteries safer, longer-lasting and more affordable, a modest but potentially useful advance for large-scale energy storage. The work, led by scientists at the Institute of Nano Science and Technology under the Department of Science and Technology, targets the interface problems that have slowed commercial adoption.

Aqueous zinc batteries have long looked like a practical alternative to lithium-ion systems because they use cheaper materials and are inherently safer, but their promise has been blunted by dendrite growth, corrosion and hydrogen evolution. The new approach does not rely on expensive redesigns of the battery itself; instead, it uses a small additive, BDIM, to alter surface behaviour where the chemistry matters most.

The broader significance lies in the world’s urgent search for grid storage that is inexpensive, durable and easy to scale as renewables expand. If zinc-based batteries can be made to last longer without sacrificing safety, they could find a niche in backup power, renewable integration and other stationary applications where cost and reliability matter more than energy density.

“BDIM selectively adsorbs on zinc metal surfaces and regulates the Inner Helmholtz Plane of aqueous zinc ion batteries,” the release says, describing the mechanism behind the advance. It adds that the additive displaces water molecules at the interface, reducing hydrogen evolution, corrosion and dendrite formation. The research, led by Dr Ramendra Sundar Dey, has been published in ACS Electrochemistry.

The practical appeal is clear: an incremental materials fix may prove more scalable than a wholesale rethink of battery chemistry. That is the sort of advance energy storage needs, not a breakthrough in search of a market, but a careful engineering tweak aimed at making existing ideas work better.

One other headline

Union Minister Ashwini Vaishnaw inaugurates US manufacturer Jabil’s Pune hub

Union minister Ashwini Vaishnaw inaugurated Jabil’s advanced manufacturing facility and export-focused data centre ecosystem in Pune, highlighting high employment potential and India’s electronics push.

This week’s episode in Conversations

If you missed the latest episode’s release on Tuesday, here’s a chat with Ramamurthy Sivakumar, co-founder and CEO at HrdWyr, a semiconductor startup in Bengaluru.

And coming up

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech and climate tech startups. Here’s wishing you a great rest of the day.

Hi,

Wherever you’re reading this, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot.

The Lede

This headline I stumbled upon is courtesy G S Madhusudhan at Incore Semiconductors and IIT Madras. He’d posted it with a couple of pithy comments on LinkedIn on the significance of this development for India’s UAV ecosystem.

India is making significant strides in indigenisation of engines for UAVs (unmanned aerial vehicles) by developing and certifying a variety of indigenous version. Collaborative efforts between government bodies such as CSIR-NAL and private companies such as Solar Defence and TridenTech have led to the made-in-India versions of Wankel rotary engines and high-power diesel systems.

The Indian-made power plants are being integrated into diverse platforms, including the TAPAS-BH-201 for long-range surveillance and the 150 kg class “Loitering Munition” for precision strikes. As India’s drone ecosystem takes off, it will also support applications in agriculture and disaster rescue operations.

The Wankel engine derives its name from the German engineer Felix Wankel who invented and developed it between the late 1920s and 1950s. And automakers like Mazda really took to it. Today the engine is seeing use in Indian UAVs.

This week’s episode in Conversations

If you missed the latest episode’s release on Tuesday, here’s a chat with Ramamurthy Sivakumar, co-founder and CEO at HrdWyr, a semiconductor startup in Bengaluru.

And coming up

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech and climate tech startups. Here’s wishing you a great rest of the day.

Hi,

Wherever you’re reading this, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot.

The Lede

Chances are, you’ve already come across this piece on LinkedIn, especially if you track India’s deep tech ecosystem. If not, it’s worth reading:
https://www.linkedin.com/pulse/i-want-india-win-just-my-money-vinod-shankar-cjkac/

Vinod Shankar, founding managing partner at Java Capital, posted this piece about three weeks ago. I’m bringing it to your attention today because we caught up this morning at the Beehive on Church Street to record an episode around the points he makes in the essay. That’s coming up Tuesday next week.

And, as he points out himself, he’s not the first to raise these issues with the dearth of capital for India’s deep tech startups, even as the RDI fund begins to boost the momentum for the flywheel. The back of the envelope math he’s pointing to is that the government has committed tens of billions to these new initiatives, from the semiconductor mission to frontier technologies, but trillions dollars in wealth are locked away in real estate and gold in rich households.

He calls for the ultra affluent to consider investing a tenth of their wealth in backing deep tech, and argues the returns for them, and the country’s economy could be transformative. Please read his original essay and the many thoughtful comments also that several senior figures have responded with, spanning industry, VC and entrepreneurship.

I’ve also pasted below an AI-generated bullet point summary here.

In his essay, Vinod Shankar argues that India’s path to becoming a developed nation is being stifled by a systemic refusal of its wealthiest citizens and corporations to invest in domestic innovation.

Here is a summary of the key points:

• The “Sediment” of Wealth: India’s wealthiest 1 percent hold roughly 60 percent of their $11.6 trillion in wealth in real estate and gold, which the author describes as “sediment”—unproductive capital that has stopped moving and does not fund the future.

• Funding the Past, Not the Future: While the “SIP boom” has increased financial participation, most of this capital flows into the Nifty 50, an index dominated by legacy sectors like finance and oil. These companies are “indices of the present” rather than the global technological frontiers.

• Corporate R&D Abdication: Indian corporations are “structurally allergic” to R&D risk, spending only 0.88 percent of turnover on innovation. In contrast, global giants like NVIDIA spend more on R&D in a single quarter than India’s entire corporate sector spends in a year.

• The Innovation Funding Gap: India’s total R&D spend remains stagnant at 0.65 percent of GDP, significantly lower than China (2.65 percent) or Israel (6.33 percent). Furthermore, unlike successful tech nations where the private sector leads R&D, the Indian private sector contributes only 36.4 percent of that total.

• Outsourcing Equity Ownership: Due to a lack of domestic risk-takers, the funding for Indian deep tech often comes from foreign entities. This creates a paradox where India builds the rockets, but foreign investors own the equity and extract the eventual returns.

• The “Colonial” Mindset of Capital: The author compares the current HNI preference for rent-seeking and gold to a “feudal” or “colonial” mindset, contrasting it with the high-risk “adventurism” that originally built global empires and Silicon Valley.

• The 10 percent Call to Action: To achieve the goal of “Viksit Bharat 2047,” Shankar challenges India’s wealthy to allocate 10 percent of their net worth to early-stage deep tech. He argues that technological sovereignty cannot be built on slogans, but requires patient, domestic, risk-tolerant capital.

The latest episode in Conversations

If you missed the latest episode’s release yesterday, here’s a chat with Ramamurthy Sivakumar, co-founder and CEO at HrdWyr, a semiconductor startup in Bengaluru.

Today’s Pick

A daily recommendation of a conversation with a founder, VC investor or industry executive, or an interesting text read as well

Founder Spotlight

A weekly recommendation of interviews with founders. From the Conversations section of ITR’s archive. Changes every Friday.

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech and climate tech startups. Here’s wishing you a great rest of the day.

Hi,

Wherever you’re reading this, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot.

A couple of headlines that caught my attention

HCLTech to acquire 10.46 percent stake in Sarvam AI

HCLTech will invest Rs. 1,427.25 crore for a 10.46 percent stake in Sarvam AI, leading its $234 million Series B funding round to advance sovereign AI.

India and France adopt Innovation Roadmap 2030

India and France have adopted the Innovation Roadmap 2030, establishing a framework for bilateral cooperation in trusted AI, critical technologies, and academic mobility.

The Lede

It boils down to what is viable, especially when it comes to an endeavour like making a semiconductor chip from a nascent ecosystem like the one in India, with the expectation that customers will actually buy it in volume.

That means, even if two founders are industry veterans and they’ve assemble a strong team of engineers, designers and marketers, everything gets determined by how much money is available. In India, a Series A is in the range of $10-15 million for a chip design company, and sometimes less. And, it takes a long time to raise even this.

Siva and Ganesh, who’ve together close to half a century of experience under their belt, look at HrdWyr as a commercial enterprise for sure — they have VC investors, after all — but also as a “nation building” contribution.

And the investors who led their Series A are like-minded. Naganand Doraswamy and Suryaprakash Konanuru at Ideaspring Capital, would like to back ventures like HrdWyr with as long a runway as they can make possible, but with the limited resources of an early stage VC firm.

HrdWyr, founded in 2023, is following through by year end on the small, but historic, milestone it announced August last, as you’ll hear in the conversation. I’d love to hear your thoughts.

Related Post

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech and climate tech startups. Here’s wishing you a great rest of the day.

Chapters

(00:00) The shift toward custom silicon and new high-volume markets

(03:37) The genesis of HrdWyr and identifying a generational shift in AI

(09:02) From bits to atoms: transitioning from cyber AI to physical AI

(12:54) Designing AI-first architectures for the intelligent edge

(21:45) Executing the product roadmap with strategic anchor customers

(30:23) Building a world-class semiconductor engineering team in India

(35:21) India’s strategic role in the global $1 trillion semiconductor market

(43:46) The 15-year vision for maturing the Indian deep-tech ecosystem

Hi,

Wherever you’re reading this, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot.

The lede

In August last year, a little known semiconductor startup (at the time) founded by two industry veterans from India, announced a small, but historic milestone. Not just for themselves, but the country.

The startup, HrdWyr Ventures, now more popularly, just HrdWyr, had struck two partnerships, one with Tata Electronics for the packaging of its first chip, and the other with boAt, the consumer electronics company, as an anchor customer for the new processor.

boAt would use their chip, named Indus 1011, in its truly wireless stereo earbuds charging cases, the companies had announced. Earlier this month, HrdWyr announced the successful close of its Series A funding round, raising $13 million in an investment led by the well known Bengaluru deep tech VC firm Ideaspring Capital.

Last week, I got a chance to sit down with Ramamurthy Sivakumar, co-founder and CEO of HrdWyr to get a sense of what next for him, Ganesh Guruswamy, and their team of 18 engineers.

Catch the full interview right here tomorrow, 6 a.m. IST. Here’s a quick preview, in which Siva talks about the practical decisions semiconductor entrepreneurs have to make, especially when they decide to go build in a nascent ecosystem such as the one in India.

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech and climate tech startups. Here’s wishing you a great rest of the day.

Hi,

Wherever you’re reading this, I hope you’re doing well. Thank you for supporting my work by being a subscriber. It means a lot.

Two robotics headlines that caught my attention

Neura Robotics closes record $1.4 billion Series C

Neura Robotics closes record $1.4B Series C, the largest ever for a full-stack robotics company, to accelerate its Physical AI platform and humanoid robots

Addverb seeks $100 million for robotics push

Reliance-backed Addverb is raising over $100 million to expand robotics and AI, develop humanoid and quadruped robots, and grow overseas.

The lede

It became clear fairly early to Kaushik Mudda and Navin Jain, founders of Ethereal Machines, that when it came to a new hi-tech hardware product offered by a startup, in India, everything from funding to sales would be a steep uphill battle.

Instead of giving up, or starting something else, they made an innovative pivot. They knew their CNC machines were really good. Potential customers were already giving them good feedback on the samples of various components that their machines were turning out.

They decided to pivot and seize that very opportunity – to make components for customers, with their own machines – instead of trying to sell the machines. They went all-in on their machining-as-a-service strategy.

Looks like that playbook is beginning to pay off for them. New well known investors have come onboard to back their startup’s Series B round, Kaushik and Navin announced yesterday, confirming various earlier reports.

The RVCE alumni, who started Ethereal even as they were graduating (but more formally in 2016), have now scored $28.5 million, giving them the financial wherewithal to expand their capacity significantly and put them on the road to scale and longer term success.

That brings their total funding to $52 million. In addition to Blume Ventures, which backed the 10-year-old company in 2019, which was probably the founders’ first institutional investor cheque, and Peak XV Partners, which backed their Series A about a year ago, they now count Avataar Venture Partners as an investor. Avataar led the Series B investment with Peak XV investing.

Moneycontrol reports that the funds be used to build a 300,000 sq. ft. factory in Doddaballapura near Bengaluru, and boost critical R&D, including an AI-powered factory software platform, Vesper, and “India’s first proprietary multi-axis CNC controller.”

The new factory will raise capacity six-fold, according to the report. Ethereal is also stepping up its business with makers of semiconductor manufacturing equipment, and expanding teams in the US and Europe.

Note that for now, their website doesn’t have a products tab for customers to click on and that’s fair — they want to project their focus on their machining services expertise to the external world. But, can, or should Kaushik and Navin also sell the CNC machines themselves. Made-in-India precision manufacturing gear that can hold its own against German or Japanese engineering?

That’s it for today. When you have a minute, please would you share this with friends who might be interested in India’s deep tech and climate tech startups. Here’s wishing you a great rest of the day.

In my recent interview with Naganand Doraswamy, managing partner, and Suryaprakash Konanuru, CTO at Ideaspring Capital, a VC firm the former serial entrepreneurs started more than 10 years ago, we touched upon a range of topics on India’s deep tech landscape.

You can find the interview in two parts. Here below are my top takeaways from Part 1.

Why Ideaspring chose to lead the investment in HrdWyr

Ideaspring led the $13 million Series A for HrdWyr because the semiconductor startup aligns perfectly with their thesis of addressing India’s $18-20 billion chip import problem. This presents an opportunity for companies such as HrdWyr to address a strategic vulnerability with designed-in-India solutions.

HrdWyr, which has just announced its first chip, focuses on power management for white goods, chargers, and brushless motors, offering a practical path to replacing imports before eventually scaling all the way to complex data centre chips. The startup’s founders Ramamurthy Sivakumar and Ganesh Guruswamy are veterans of the industry, having worked in companies including Intel, AMD, Motorola and Sandisk.

The investment is also highly capital-efficient for a VC firm the size of Ideaspring, which can’t make Silicon Valley style bets of tens or hundreds of millions of dollars. HrdWyr fits Ideaspring’s budget while solving immediate local problems – a playbook for all Indian deep tech VCs, pretty much.

The rapid evolution of India’s deep tech ecosystem

There is a dramatic shift in the quality and quantity of deep tech startups compared with when Ideaspring launched in 2016. During their first fund, only three or four out of sixteen investments truly qualified as deep tech or science-based, as the ecosystem primarily offered B2B software applications.

By Fund II, this ratio shifted significantly to eleven deep tech companies out of seventeen investments. Their third fund is expected to consist almost entirely of deep tech or science-focused startups, reflecting a maturing pipeline of researchers and domain experts.

While early AI startups often focused on simple applications of existing models, today’s entrepreneurs are conducting more fundamental research in sectors such as semiconductors and biotech.

This progression validates their long-held thesis that India is capable of building world-class products, even as one has to remain realistic about the capital and market challenges ahead.

“But I’m still very concerned about Series A investments from funds outside of India. That’s a weak point for us.“

Naganand Doraswamy

Establishing sustainable technology moats in the age of AI

Suryaprakash, an enterprise software veteran himself, points out that building simple applications on top of existing deep tech is no longer sufficient because advanced models like those from Anthropic, for example, can easily absorb those functions. To establish a true “moat” or differentiator, Ideaspring seeks startups grounded in ten to fifteen years of research.

The paradigm of software development has fundamentally changed; what once required a twenty-person team and months of work can now be achieved by a few people in weeks or less. This acceleration forces investors to look for specialized differentiators like Small Language Models (SLMs) or unique physics-based models that cannot be quickly replicated.

The software industry is “going through a metamorphosis,” Naganand notes, with new and more capable AI features being released literally every day. AI will be an increasingly more powerful enabler, but the investment focus is now clearly on areas such as semiconductors and biotech, where founders with deep domain expertise can go after potential large local and eventually global opportunities.

Navigating the hurdles of domestic procurement and market risk

A significant challenge for Indian deep tech is not necessarily the size of the domestic market per se, but the risk-averse nature of local procurement. While policy intentions are strong, decision-makers at the ground level are often forced to follow extant rigid guidelines that prohibit buying from startups which by their very nature can’t offer long histories or massive revenues.

A cultural shift is required where purchasing officers are encouraged to take calculated risks on local innovation rather than defaulting to established global companies. Encouragingly, the government’s Research and Development Innovation Fund (RDIF) is helping by increasing the survival runway and credibility of these startups.

When buyers see a startup has sufficient capital to survive and service its products, their confidence increases. However, for the ecosystem to truly thrive, the private sector and defense procurement must open up more quickly, providing the necessary market pillar alongside talent and capital to complete the innovation cycle.

Addressing the capital gap and the Series A weak point

Naganand identifies Series A funding as a critical “weak point” for Indian deep tech because foreign funds are often nervous about investing in companies domiciled in India at that specific growth stage. While seed funding is robust and Series B investors focus more on scale than location, the Series A gap remains a challenge for startups looking to cross the growth cusp.

Domestically, raising capital from local Limited Partners (LPs) is difficult due to general risk aversion and a lack of understanding regarding the long, twelve-year cycles of venture capital. Many family offices prefer more liquid investments or real estate over startup funding.

The investors argue that India urgently needs to increase its innovation spend from 0.7 percent of GDP to 3 percent to avoid being a technological laggard. They welcome international capital at any stage, and especially at the Series A level, believing that more competition and infusion of funds ultimately benefit the entire ecosystem.