A deep tech VC’s impassioned plea to the desi ultra rich to unlock startups’ true potential
Deep Tech Dispatch Issue #11 | A newsletter from India Tech Report
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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.