India Can Build Rockets, But Can Its VCs Fund The Next One?

American technology journalist Ashlee Vance's criticism of Indian VCs has triggered a debate, with founders questioning investors' risk appetite and prominent investors including Antler's Nitin Sharma, Chiratae's TC Meenakshisundaram and Unacademy's Gaurav Munjal offering competing perspectives

Indian deeptech funding surged 176% YoY to $290 Mn in Q3 2026, but deal count slipped from 29 to 28. Meanwhile, the median investment size across the broader startup ecosystem remained unchanged at $3 Mn, raising questions about how widely the funding recovery is being felt

From historical deeptech investments and a wave of dedicated VC funds to corporate procurement, LP expectations and the government's ₹1 Lakh Cr RDI scheme, India's deeptech financing ecosystem is evolving, but gaps in early-stage risk-taking and long-term capital persist

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On July 18, 2026, Skyroot Aerospace achieved a historic milestone when its Vikram-1 rocket successfully placed satellites into orbit, becoming the first privately developed Indian rocket to accomplish an orbital launch.

For a country whose space programme was historically dominated by ISRO, it was a powerful demonstration of what Indian entrepreneurs could achieve in advanced technology.

Three months later, Ashlee Vance — the American journalist best known for his bestselling biography of Elon Musk and reporting on the global space industry — turned his attention to India’s technological ambitions.

His question was less about the capabilities of Indian engineers than the willingness of Indian investors to back them. He asked: 

“Why are Indian VCs so afraid to take risk and make money?”

The October 22 post accompanied Vance’s Core Memory feature exploring India’s emerging hardware economy.

After three weeks meeting 15 Indian companies, Vance appeared impressed by the technological ambitions of their founders but far less enthusiastic about the state of the country’s venture capital ecosystem. He subsequently doubled down, claiming he had rarely encountered a market where VCs had a worse reputation among founders.

What followed was an unusually candid debate.

Founders complained about investors demanding commercial traction before technologies had been validated, prolonged diligence processes and excessive dependence on founder pedigree.

Investors pushed back, highlighting India’s growing list of deeptech successes, the increasing availability of specialist capital and the structural challenges of financing scientific innovation.

But the timing makes this debate far more consequential than another disagreement on X.

As AI threatens to automate parts of the software-services industry that helped establish India as a global technology powerhouse, the country’s ability to create and own foundational technologies is becoming increasingly important.

India has demonstrated that its entrepreneurs can build complex technologies. The more difficult question is whether venture capital and private equity can repeatedly back such breakthroughs.

Indian Founders Aren’t Just Questioning Capital, They’re Questioning The VCs

One of the strongest responses came from Akash Kulgod, founder of Dognosis, which is developing canine-assisted cancer detection technology.

In a detailed post, Kulgod compared his experience interacting with approximately 80 investors, around 65% of whom were based in the US. His criticism ran deeper than simply stating that Indian VCs rejected his startup.

He said US investors typically made relatively quick decisions, rejecting the opportunity when they lacked conviction in the technology or founding team.

Some Indian investors, he alleged, extended discussions over repeated meetings and visits, only to demand commercial traction or stop responding. For a company developing medical technology, any delays in the development cycle hurt.

Clinical validation, technical testing and regulatory approvals can require years before meaningful commercial revenue becomes possible.

An investor demanding revenue before the technology is proven may effectively eliminate the opportunity instead of properly evaluating the technology.

Kulgod also questioned whether some investors possessed the technical understanding needed to assess unfamiliar scientific problems.

Other founders raised concerns about investor dependence on IIT or IIM credentials, professional networks and the reputations of existing backers when evaluating early-stage startups.

These are undoubtedly individual accounts, not evidence that such practices are universal across Indian VC firms. But they expose an uncomfortable question.

If investors require commercial traction, institutional validation and another investor’s conviction before writing a cheque, how much technological risk are they actually underwriting?

There is an important difference between financing a technology after it works and........

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