VC firm Shastra VC has launched its third fund with a corpus of $100 Mn (about ₹963 Cr) to back early-stage startups
The fund will focus on space and defence technologies, AI, and renewable sciences, while supporting startups from seed stage to Series A and beyond
In a statement, the firm said it will invest between $500K to $3 Mn in intellectual property-led startups from the fund
Bengaluru-based VC firm Shastra VC has launched its third fund with a corpus of $100 Mn (about ₹963 Cr) to back early-stage startups in deeptech, AI and climate sciences sectors.
In a statement, the firm said it will invest between $500K to $3 Mn in intellectual property-led startups from the fund. The fund will focus on space and defence technologies, AI, and renewable sciences, while supporting startups from seed stage to Series A and beyond.
Founded in 2022 by former operators Vasant Rao, Avijeet Alagathi and Ashis Nayak, Shastra VC has backed startups across space systems, advanced manufacturing, semiconductors, AI and biotech.
It claims to have deployed approximately $55 Mn across its first two funds. The firm has invested in 30 startups and helped raise more than $80 Mn in follow-on capital.
Its key portfolio startups include Alt Carbon, Simplismart, Sisir Radar, Avammune, and Sanlayan.
Rao and Nayak previously cofounded Autoninja, which was acquired by ICICI Lombard. Meanwhile, Alagathi founded BYG, which was acquired by Curefit.
The firm has also built an advisory network comprising former Tech Mahindra CEO CP Gurnani and former Kotak executive C Jayaram, along with experts across biotech, semiconductors, climate and space sectors.
The launch comes amid rising investor appetite in India’s deeptech ecosystem, spanning AI, semiconductors, spacetech and robotics, further supported by government policy support and a growing pipeline of research-led startups.
For instance, Piper Serica yesterday launched the Bharat Tech Fund, a Category II AIF with a target corpus of ₹600 Cr and a ₹200 Cr greenshoe option, to back startups across semiconductors, AI, spacetech, defence tech and biosciences.
Earlier in March, Inc42 reported VC firm Celesta Capital is looking to launch a ₹2,000 Cr India-focused deeptech fund after receiving SEBI approval for its Category II AIF. The fund is expected to back early-stage startups with cheque sizes ranging from $3 Mn to $7 Mn.
The sector also received a policy boost recently, with the Centre extending Startup India benefits for deeptech startups to 20 years and increasing the turnover eligibility threshold to ₹300 Cr from ₹200 Cr. The government also rolled out incentives such as tax benefits, ESOP-related TDS deferment and relaxed loss carry-forward norms.
Deeptech has also emerged as a key focus area under the second phase of the Startup India FoF scheme, which has a corpus of ₹10,000 Cr. The government has expanded the scope of the scheme to support AIFs investing in startups with longer R&D cycles and higher capital requirements.
The last two Union Budgets also introduced multiple initiatives to strengthen the segment, including the launch of a ₹1 Lakh Cr RDI scheme and the announcement of India Semiconductor Mission 2.0.
As a result, the funding momentum in the sector has accelerated. Deeptech emerged as India’s third most-funded startup segment in 2025, after ecommerce and fintech, with startups raising about $500 Mn across 87 deals. The sector attracted another $166 Mn in Q1 2026 alone.
Source: Inc42 - Startups
