Capability Over Scale: Piper Serica's Ajay Modi on Why India's Most Important Startups are Hidden Inside Supply Chains

Indian tech startups raised about 7.4 billion dollars in 2024, up 23 percent from 2023, with deeptech alone drawing around 1.6 billion dollars and growing roughly 78 percent in a year. Nasscom and Zinnov now count more than 4,000 deeptech startups within a base of 32,000–35,000 tech ventures.

Piper Serica’s fund I has backed over 33 companies across deeptech, spacetech, defence, semiconductors, fintech infrastructure and mobility, including platforms in laser space communication, edge AI chips, underwater robotics, telematics and commercial EV fleets. Our new Bharat Tech Fund will further deepen our investments in these areas. Newer deals concentrate in IP‑led hardware, firmware and system software. First founder meetings now open with orbit plans, chip architectures or reliability data, not only GMV charts.

This shift follows a reset after the 2020–2021 liquidity cycle, when capital largely chased consumer internet businesses that scaled fast on subsidies and marketing. Investors saw that scale without defensible capability created fragile companies once acquisition costs rose and capital tightened.

Deeptech has become a clear winner from this correction. Semiconductors, aerospace, industrial AI, robotics, defence electronics and advanced manufacturing are now treated as core infrastructure for India’s next economic cycle, not side bets. The ecosystem is moving from “growth‑first” to “capability‑first” investing, favouring companies that solve hard engineering problems and sit inside strategic supply chains.

Investor interest in spacetech, semiconductors, defence, robotics and precision manufacturing is rising where three lines meet: national policy support, large end demand and a rewiring of global supply chains.

India’s space economy stands near 8–8.5 billion dollars and targets 40–45 billion dollars by the early 2030s. More than 400 space startups have attracted over 500 million dollars, and one study expects 3–3.5 billion dollars of VC and PE funding into spacetech by 2030. This sits on clear demand for launch, earth observation, communications and SSA, not just one or two missions.

In semiconductors and electronics, the Semicon India and component PLI stack targets around 300 billion dollars of electronics output with deeper local value addition. Output already stands near 115 billion dollars, driven by mobiles, EMS firms and exports, which creates steady need for chip design, embedded systems, testing and industrial hardware.

On the talent side, founders now come from ISRO, DRDO, global chip companies and top IIT labs. Piper Serica’s portfolio reflects this mix across spacetech, chip design, mobility electronics, cyber security and industrial software, not only consumer apps. Robotics, defence subsystems and precision manufacturing then become natural venture targets, since they plug into large, multi‑year procurement and export programs.

Electronics output in India has grown from about 10 billion dollars in 2014 to roughly 115 billion dollars today. Local factories now meet close to 110 billion dollars of the 140 billion dollars of domestic demand, helped by PLI, component schemes and state incentives that reward value added in components and sub‑systems, not assembly alone.

Defence and spacetech sit on a similar track. iDEX offers grants up to 1.5 crore rupees for early projects and up to 10 crore rupees under iDEX Prime, linking startups directly to procurement. IN‑SPACe’s Technology Adoption Fund gives spacetech founders a route from demo to deployment. These instruments lower early revenue risk and lengthen runway for hardware and industrial companies.

Piper Serica now treats such programs almost like demand pipelines. A mobility platform like Alt Mobility gains from EV and manufacturing incentives. Chip design, cyber security, airport‑tech, supply‑chain and drone companies in the wider portfolio benefit from electronics, defence and digital upgrades that shift spend toward local technology. Together they show how self‑reliance and manufacturing policy now back a wide mix of themes, not one narrow sector.

For venture investors, this creates a different thesis. Capital is shifting from funding user acquisition to funding companies that can become long‑term infrastructure layers inside strategic industries.

The next three to five years can be India’s most important industrial buildout in decades. The sheer scale of infrastructure creation will open new venture ground across aviation, electronics and advanced industrial tech.

In aviation, real value will sit in software and airport tech, not just airlines. Global platforms like Amadeus and SITA already run operations, billing and passenger flows for hundreds of airports. India is now building its own stack through our portfolio company Blunav, which is developing a full‑stack, cloud airport operating system. At Chennai airport its airside software cut runway occupancy time by 22 percent across more than 3,500 flights. This kind of system‑level software, not just front‑end apps, will be central as traffic grows.

Electronics systems offer a second wave. A serious push to become an electronics hub creates demand for embedded systems, power electronics, industrial controls, sensors, and testing infrastructure that improve reliability and localise supply chains.

The third wave sits in robotics, industrial AI, digital twins, machine vision and autonomous inspection. Indian factories can no longer rely on low labour cost. They need automation, predictive intelligence, energy optimisation and precision monitoring to stay competitive. The most valuable companies may be those hidden inside these supply chains, compounding quietly through efficiency.

Piper Serica’s mix of semiconductor, spacetech, robotics and automotive tech companies, including Sense semi, Pantherun, Six Sense Mobility, Coratia and others, shows how early‑stage capital can attach to that long buildout

Evaluation frameworks for deeptech and industrial companies differ sharply from consumer startups.

Consumer investing focuses on speed: how fast a company acquires users, scales distribution, lifts engagement and grows revenue. Metrics such as CAC, retention, burn multiple and growth rate dominate reviews.

Tech investing is engineering led. Investors test whether the core system works, whether it is defensible and whether it runs reliably in demanding real‑world settings. In industrial contexts, technical validation matters more than narrative. Diligence goes into IP strength, field reliability, manufacturing repeatability, regulatory paths, certifications, scaled unit economics and integration risk. A single quality failure in production can push commercial roll‑out back by years.

Timelines differ. Consumer products can ship and iterate in weeks. Deeptech teams may spend years running experiments, hardening hardware and software, and proving performance before mass use.

Competitive moats differ as well. Consumer firms often compete on brand, convenience or user networks. Deeptech and industrial firms win through engineering depth, proprietary stacks and long contracts embedded inside customer operations.

Venture investing in these areas now looks closer to long‑cycle industrial capital than classic software checks. It rewards domain skill, patience and strict technical diligence.

Yes, very clearly. Technology depth and industrial relevance are starting to matter more than raw scale.

India’s “easy growth” phase is over. Capital now avoids models that rely on subsidies, discounts and constant fundraising. Profitability, resilience and defensibility sit at the centre of most investment debates.

At the same time, India wants to move from digital consumption to real technological power. Semiconductors, aerospace, defence, industrial automation, electronics and robotics are now strategic, not peripheral. Investors know these sectors start slower but often build stronger moats.

Our portfolio company Thrustworks Dynetics is a sharp example. The team has test‑fired India’s first resonance‑based rocket ignition system with only about 7 crore rupees of seed funding. The system replaces heavy spark or pyrotechnic igniters with a geometry‑driven, shockwave ignition method that enables multiple restarts, lighter engines and longer satellite life. Only a handful of programs worldwide have reached this point, so investors are actively chasing such propulsion and deep hardware stories.

Scale will still matter. The difference now is that the most sought‑after companies pair scale with hard engineering, proprietary systems and real industrial relevance.