Investor backs Piyush Goyal on ambition gap: 'Less than 10 of 400 startups in India are deep tech'

Founder and investor Kushal Bhagia has responded to Commerce Minister Piyush Goyal's recent remarks on India's startup ecosystem, defending service startups while acknowledging the country's lack of deep-tech ventures.

"I started a startup in India in 2012. Started a VC fund in 2019. Have backed 150+ startups and have met at-least 10,000+ startups," Bhagia wrote, before weighing in on the Startup Maha Kumbh debate sparked by Goyal. 

"No one hates the Govt machinery and babus more than me. On balance India succeeds despite their best efforts not because of them."

He pushed back on Goyal's criticism of delivery apps and gig work. "There is no need to dunk on delivery apps – in a culture where no one does what they say they will do – that too on time – it's insane that they manage to get millions of gig workers to do deliveries on time and give back time to millions of their users."

"It's an insanely tough logistical operation to crack and does actually require fair bit of technological prowess. India does it better than the west and we should be proud of them."

On consumer startups, he added, "People are building and investing in beauty and food brands because people are buying from these brands. Any smart entrepreneur/investor goes where the customers are so not sure what's the point of putting them down."

However, Bhagia acknowledged the minister's core point on ambition and deep tech. "Piyush Goyal is still right in terms of ambition and lack of deep tech startups in India."

Listing examples from his portfolio, he said, "We at All In Capital are proud first backers of hard tech companies like PierSight (Satellites for marine traffic tracking), Mave Health (wearables to treat mental health), GridOS (ODM/Manufacturing play), Karban (air purifier+fan+light in one device)."

He noted that in his experience, "We see about 400 startups a month and less than 10 would be deep tech."

Bhagia said one key reason for the shortage is brain drain: "A large chunk of our deeply technical talent left India right after their under-grad and works in deep tech in the US. Hence founders starting companies in India skew towards ops specialists/product folks but not deeply technical folks."

He also pointed out the lack of local role models in the deep-tech space. "A Flipkart spawned a generation of new founders in e-com, fintech, SaaS… This hasn't yet happened with DeepTech."

Tracing the evolution of startup inspiration, Bhagia said, "When I started my first company from BITS in 2012, the smartest, most ambitious thing one could do was to go to the US, do a masters and join Google or Facebook." Today, he believes that's changing. "The poster boys for the startup ecosystem are increasingly becoming folks like Awais Ahmed and Kshitij from PixxelSpace – raised $100M, launched satellites, all before turning 30 – truly path breaking stuff."

"I believe that smart technical talent has finally started staying back in India to build hard tech companies from India," he concluded. "And I think it's only going to snowball from here."