The numbers back that sentiment: Calendar year 2025 saw 15 M&As, up from a mere five in 2024, according to data from Tracxn.
Investors say that while the country’s deep-tech ecosystem is still maturing, global corporations and industrial giants are increasingly adopting a ‘buy-over-build’ strategy to acquire proprietary technology and talent.
“For early-stage investors, the largest exits are likely to come from strategic M&As, particularly cross-border acquisitions, and secondary buyouts. Strategic buyers often value proprietary technology and engineering talent earlier than public markets do,” said Kushal Bhagia, founder and partner at All In Capital.
Bhagia expects that, over time, as the ecosystem matures, domestic IPOs will become a more viable route. The VC firm has allocated roughly 30 per cent of its deployed capital to deep-tech startups.
Manu Iyer, managing partner at Bluehill.VC, also believes that large deep-tech exits will be driven by M&As. “We expect the largest deep-tech exits to be driven primarily by strategic M&A and cross-border acquisitions, supplemented by a maturing domestic IPO market.” Bluehill, which is currently deploying from its Rs 350 crore pure-play deep-tech fund has invested in companies including Ethereal Exploration Guild, Zebu Intelligent Systems, Helex Bio, Sophrosyne Technologies, and OptoML.
Another deep-tech investor Bharat Innovation Fund also expects a similar exit model.
“The Indian public markets are showing a growing appetite for high-growth, IP-backed hardware and deep-tech stories, providing a viable path to the public markets that simply did not exist for deep-tech businesses five years ago,” said Shyam Menon, the firm’s co-founder.
Deep-tech exit playbook
Global corporations, primarily in aerospace, semiconductors, industrial automation, and advanced manufacturing, are actively seeking differentiated technology assets, Iyer of Bluehill said. “Indian deep-tech companies building proprietary platforms in these areas are likely to become attractive acquisition targets once technical validation and revenue visibility are established. In many cases, these companies may be more valuable as strategic assets within larger global platforms than as standalone listed entities,” he added.
Inntot, which provides solutions for digital media receivers, is a prime example of the kind of strategic M&As that are finding favour in the deep-tech space. The Unicorn India Ventures (UIV)-backed company was acquired by Visteon, a US-based advanced mobility firm that is also a Fortune 500 company. Inntot founder and managing director Anil Joshi said the acquisition was mainly because of the IP they created and that it provided a meaningful exit.
“Earlier, deep-tech faced challenges, largely due to the limited number of companies and a lack of focus on intellectual property. But the kind of companies and IP India is now producing is cutting-edge, and investors are taking them seriously. We are currently in talks for an exit from one deep-tech investment, and once it goes through, it is expected to deliver a five-fold return,” Joshi said.
Likewise, Videoverse, an AI-driven video intelligence platform backed by Bluehill’s team in an earlier vehicle, was acquired in 2025 by Minute Media, a US-based technology and sports content firm. The deal, valued at around $280 million, delivered over 60x returns to early investors.
Bluehill noted that its entry valuation for the industrial AI firm Detect Technologies was approximately Rs 90 crore but the company has since been marked at roughly Rs 1,100 crore. “While this remains unrealised, it demonstrates how India-built industrial deep-tech platforms serving global customers can compound value meaningfully before liquidity events.”
On the IPO side, Sedemac, an investment from India Innovation Fund (IIF), is currently in the process of a domestic IPO, highlighting the public market’s growing appetite for high-end automotive controls and electronics IP. The IIF was an early deep-tech seed fund set up by one of the partners, Ashwin Raguraman, of Bharat Innovation Fund in 2010.
Deep-tech investments on an uphill slope
Reflecting the growing investment in deep-tech, data from market intelligence platform Tracxn shows that in January and February this year, homegrown firms raised $997 million across 47 companies, up sharply from $162 million across 57 companies in the same period last year. For the full calendar year 2025, funding stood at $1.65 billion.
As for exits, irrespective of they are structured, investors say that deep-tech returns, when realised, can be outsized due to defensible intellectual property and sticky enterprise contracts.
“True deep-tech companies rely on defensible global IP and sticky B2B (business-to-business) enterprise contracts rather than high cash-burn consumer acquisition mean their unit economics are fundamentally stronger,” Menon said, adding that strategic buyers often pay premium for technology moats and faster time-to-market advantages.
Bhagia of All in Capital echoed that view. “While we have not yet exited from our deep-tech portfolio, ecosystem examples indicate that when deep-tech companies succeed, they can generate strong returns due to defensible IP and strategic value. The key factor is patience — deep-tech requires longer time horizons,” he said.
