Deep tech, AI, and Talent will Power India's Next Big Leap: Vikram Gupta Emerging sectors like AI, deep tech, and climate solutions are becoming central to how venture capitalists plan long-term growth and innovation.

Venture capital has always been about taking bold bets on what the future holds. Over time, what was considered "emerging" has changed many times. Years ago, investors were excited about the internet, mobile phones, and cloud computing. Now, the new wave of opportunities lies in AI, space tech, climate solutions, and deep tech. These areas are now becoming the heart of how venture capitalists plan their investments and find long-term growth opportunities.

This changing trend was the focus of a conversation between Vikram Gupta, Founder and Managing Partner of IvyCap Ventures, and Ashish Kumar, Co-founder and General Partner of Fundamentum, during the Entrepreneur 2025 event held in New Delhi. Both investors shared their views on how venture capital is adapting to new technologies and why emerging sectors are playing a bigger role than ever before.

Ashish Kumar said that investing in emerging sectors has always been part of the venture capital approach. He explained that in the past, new areas of innovation such as the internet and mobile technology were considered risky but went on to create enormous value across the world. According to him, the same cycle is now repeating, only with newer technologies like AI and deep tech.

Vikram Gupta agreed but pointed out that the scale of innovation today is much broader. "We are a pure domestic fund investing from seed to Series B, with Series A cheques of about INR 50 to INR 60 crore. We only invest when we know we can add value," he said. "Our focus is on three themes: India's growth story, Indian entrepreneurs building for global markets, and emerging or deep technology."

He shared that IvyCap has already made 55 investments and manages about 40 active companies. These include well-known names such as Purplle, Clovia, Bluestone, Biryani by Kilo, and Miko, a robot designed to engage and educate children. Gupta said that AI is already changing many industries, from healthcare and finance to retail and research, and anything that depends on data is being transformed.

Ashish Kumar then pointed out that while emerging sectors offer great promise, they also involve higher risk. "When you invest in new sectors, you take both market and technology risks. So, the expected return also has to be higher," he said.

Gupta explained how IvyCap balances its portfolio to manage such risks. "In our third fund worth INR 2,100 crore, we have kept about INR 100 crore for very high-risk investments," he said. "We have invested in companies like Dhruva Space, Morphing Machine in semiconductors, and Botsync in warehouse automation. Some of these are at early stages and could fail, but others could grow into game changers." At the same time, he said the fund also invests in more stable companies like Snitch, which was already profitable when IvyCap came in.

When the discussion turned to India's place in the global deep tech ecosystem, Gupta said that while India cannot yet compete with the US in terms of infrastructure spending, the country has a major advantage in talent. "If we focus on solving India's own problems, that itself is a massive opportunity," he said.

He also highlighted the government's decision to allocate INR 1 lakh crore to support deep tech research and development. "We work closely with IITs and IIMs to identify early-stage companies and support them with both funding and mentorship," he said.

Kumar added that certain areas such as biotechnology, space, defense, and clean energy are especially promising for India. Gupta shared the example of Bijli, a company IvyCap invested in that uses AI to help electricity providers supply power more efficiently and at lower cost.

Gupta said that risk evaluation has become an important part of investment decisions. "We carefully study how factors like tariffs or wars can affect our portfolio companies. But in the end, venture capital is about taking risks. You invest in founders who can adapt and grow," he said.

He gave an example of how strong founders can transform their businesses. "If you had turned down Flipkart because it started by selling only books, you would have missed the chance to back an e-commerce giant. What matters most is the founder's conviction and ability to pivot when needed," he explained.

Ashish Kumar agreed and advised entrepreneurs to stay focused once they choose a sector. "Do not change industries too often. Stay in one area, learn deeply, and make adjustments within it. That is how long-term success happens," he said.

When asked about what creates a lasting competitive edge, Gupta said that real strength comes from execution. "Ideas and talent are everywhere, but success depends on how well you execute them," he said. Kumar added that younger founders can use their energy and speed as an advantage, while more experienced founders can rely on their understanding of the market.

The discussion highlighted that emerging sectors now form the core of venture capital strategy. With India's talent and innovation, the next wave of startups will drive the nation's growth.