India is soon to come up with a venture capital (VC) fund for defense and aerospace innovation. Ajay Kumar, the former Secretary of the Ministry of Defence, revealed lately at an industry conference with a hint that a new era for deep technology in India is on the card.
Kumar said that they are taking the pride in the creation of a venture capital fund to focus on these strategic sectors. He highlighted the unique challenges and opportunities these industries present.
The exact size of the fund is yet to be disclosed, but Kumar assured that they have exceeded the initial target. The announcement of the fund’s first close is expected in next few weeks and it signals a robust start in the sectors.
The significance of this VC fund represents an effort to bolster startups and foster innovation within the defense and aerospace sectors. The sectors were earlier dominated by public sector undertakings (PSUs). The fund aims to support startups in becoming key players and cater directly to the defense forces.
The domestic defense market presents a substantial opportunity. It is learned that about 75% of the defense project procurement focused on the Indian sector. Innovations for Defence Excellence (iDEX) program and more such initiatives are set to benefit from the new VC fund. Kumar also simultaneously pointed out that the space sector is poised for tremendous growth. The sector will be a major beneficiary of the R&D program.
Apart from all these, the defense sector is witnessing increased interest in initial public offerings (IPOs). It is to spill over into the space sector. A surge could be witnessed in the space sector startups and small companies entering the IPO market in the near future. It will be a moment for fresh opportunities for investors.
