Episode Title: Hard Tech & Hard Truths
Guest: Manish Singhal - Founding Partner of pi Ventures
Episode Summary:
Is India on the verge of becoming a global Deep Tech powerhouse? What will it take to get there?
In our latest Chai & Chips episode, I sit down with Manish Singhal, Founding Partner of pi Ventures, one of India's pioneering Deep Tech VCs, to unpack this very question. His journey from a hands-on engineer to a leading investor provides a uniquely grounded perspective on the ecosystem.
This is a must-listen for anyone building or investing in the future of technology in India.
YouTube episode link:
Key Insights:
In this conversation on "Chai & Chips," I sat down with Manish Singhal, a technologist, entrepreneur, and the founding partner of Pi Ventures, one of India's first Deep Tech-focused venture capital funds. The discussion offered a pragmatic yet optimistic deep dive into the evolution, challenges, and immense potential of India's Deep Tech ecosystem. Here are the key insights and takeaways from their dialogue.
1. The Evolution of Deep Tech in India: From Scary to Mainstream
Manish paints a vivid picture of Deep Tech’s journey in India, framing it as an "evolution curve." Just a few years ago, in 2015, "Deep Tech" was a scary and misunderstood term. Today, it’s a mainstream buzzword. This shift is not just semantic; it reflects a growing maturity in the ecosystem, fuelled by a crucial tailwind: government support. Manish highlights the symbiotic relationship between defence and Deep Tech, noting that a nation’s defence needs often drive its most advanced technological innovations. The Indian government's increasing focus on opening up defence grants and promoting indigenous technology through initiatives like Atmanirbhar Bharat is creating a powerful inflection point for the entire sector.
2. The Current Innovation Landscape: A Startup-Led Revolution
A critical observation from Manish is that at present, genuine innovation in India is overwhelmingly driven by startups. While government research bodies like ISRO and DRDO contribute significantly, particularly in defence, large Indian corporations have been slow to innovate, often preferring to acquire companies abroad rather than fostering domestic R&D. This leaves a vast, untapped potential for corporate-startup collaboration. The good news however, is that for a quality Deep Tech startup with a strong idea and team, funding is no longer the bottleneck it once was. Private capital is available and actively seeking meaningful opportunities.
3. Government's Role: Simplify, Foster, and Get Out of the Way
While acknowledging the positive intent behind government policies, Manish offers a candid critique of their execution. He points to "leakage" and delays—such as grants taking years to reach a startup—as major hurdles. His prescription for the government is threefold:
Foster Grassroots Innovation: Instead of focusing solely on large-scale projects, the government should nurture the base of the innovation pyramid. This means more accessible "mini-grants" (e.g., ₹10-15 lakhs), creating effective "tinker houses" in universities, and supporting more business-oriented PhD research.
Simplify Everything: The biggest impediment to growth is "red tape." The complexity of running a company in India, from navigating angel tax to basic compliance, pushes many founders to headquarter their companies abroad, leading to a "leakage" of valuable IP and future exits. Simplifying day-to-day business operations is paramount.
Define Roles Clearly: The government's strength lies in providing catalytic capital through grants and soft loans, not in making equity investments. Equity funding, Manish argues, should be left to private venture funds, which are better equipped to manage the risk and drive commercial success.
4. The Future is Deep and Global
Manish holds a deeply optimistic vision for India's future, predicting that within a decade, India will be "absolutely in the center of the Deep Tech map of the world." This isn't just wishful thinking. He argues that post-COVID, geographical boundaries have blurred. An Indian startup is no longer just an Indian startup; it is a global company from day one. The problems they solve are global, their customers are global, and their talent competes on a global stage. This global mindset is essential for the next phase of growth.
5. Advice for Deep Tech Founders: The Duality of Passion and Pragmatism
For aspiring Deep Tech entrepreneurs, Manish’s advice is nuanced yet powerful. He emphasizes the need to embody two contradictory thoughts simultaneously:
Be deeply in love with your technology: You must have an unshakable belief in and a profound understanding of your innovation.
Be able to step away from it: You must detach yourself enough to ask the hard business questions. Who needs this? Does it create a 10x disruptive difference or just an incremental improvement?
The most successful founders are those who can transition from a "technology narrative" to a "business narrative" early in their journey. Instead of building a technology and then searching for a use case, they start with a clear understanding of the market need and build a solution for it. As exemplified by portfolio companies like Agnikul (3D printed rockets), the "who cares?" question must be answered with a compelling vision of how the technology enables a new, better, or more accessible future.
In conclusion, Manish Singhal's insights reveal an Indian Deep Tech ecosystem at a pivotal moment. The raw ingredients—talent, ideas, and capital—are increasingly in place. The path forward requires a concerted effort to simplify the operating environment, foster innovation from the ground up, and empower founders to think globally, ensuring that India's "deep" future is not just a possibility, but an inevitability.
Connect with our Guest:
pi Ventures: https://www.piventures.in/
Manish Singhal on LinkedIn: Manish Singhal | LinkedIn
Manish Singhal on X: Manish Singhal (@manish_saarthi) / X
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Episode Transcript
Speakers:
Manish Singhal (Guest)
Prakash Mallya (Host)
(00:04) Manish: It helps to sometimes see a country's macro over a 10-year period, right? So right now we are talking about 2025.Today Deep Tech is not a scary word. In fact, everybody is singing Deep Tech, whether you understand technology or not. 2015 it was a scary word. 2005 it was not even known. Right? So it's an evolution curve.
(00:31) Manish: Defence and Deep Tech typically go hand in hand. Now you can see how much, how much emphasis government is putting in opening up defence grants for Deep Tech companies. So we are now at an inflection point.
(00:44) Manish: Currently, Prakash, and I could be wrong, my belief is that only startups innovate in India. Government sector does some part in ISRO, DRDO etc. Of course, they do that for the defence. But big companies don't innovate in India.
(00:1:01) Manish: It's changing. It was very hard two years back. But we have seen now, uh, if you have a good idea, good founding team, etc., like very few companies have not been able to raise the money that they needed.
(01:22) Prakash: Hi viewers, welcome to Chai & Chips, and this is Prakash Mallya. We have with us today Manish Singhal, the founder of a Deep Tech venture fund, Pi Ventures, one of the first few that started in India. He's a technologist, an entrepreneur and a venture capitalist. He has had success in variety of different fields. We'll talk about it. He's also started Let's Venture, which was a marketplace which helped Indian investors as well as early-stage startups towards building a very strong ecosystem in venture. And he's also a wildlife photographer, which we will talk less of, but it explains the diversity of things he has done. So welcome to the show, Manish. Great to have you.
(02:10) Manish: Thank you so much Prakash. Pleasure to be here.
(02:13) Prakash: Likewise, likewise. It's been a while. Hope you're doing well.
(02:17) Manish: Yes, yes. Hope the same for you.
(02:20) Prakash: Yes, indeed. Thank you. So let me start with your journey, right? You've been in Deep Tech for a bit now, but what made you, Manish, take on this highly complex and very difficult space versus many other opportunities, especially like software services that India is very well known for to pursue that?
(02:45) Manish: I think, two probably reasons, right? One is my own journey. So for the good or the bad, for almost 20 plus years when I was working as an engineer, I happened to actually end up working in the team within that overall team in the hardest tech that we were trying to sort of unravel at various points of time. So, in some sense in my, all my developing journey, my work was always on the cutting edge of technology. Right? Be it in Motorola days, Tata Elxsi, Ittiam Systems and later on Sling, right? So we built cutting edge products in those times. And that trained the DNA in a different way, right? It trained me to look at newer technologies with a different lens. It's also trained me to look at how these technologies can actually make a big outcome for businesses, right? Not just from a tech standpoint. So that, that was almost 20 years of working in the trenches that led to a belief that, you know, technology is what will create a future, right? And very strong belief. And when I left my startups and then started, sort of not having a plan, just sort of advising startups and working with them, I realized that hardly anybody is able to actually back a fundamentally different technology when they were starting. This is 2011, '12. And everybody in those days was going on e-commerce and things like that. And this good tech startups were not able to get their initial seed capital as well just to get moving. And the reason for that is essentially investors are not able to put two and two together, right? Technology looks scary to them. They're not able to see the business side of it, long gestation period possibly. Not happening. So that sort of led to a role where I felt, you know, these companies need money and I could support them. Second thing is my own inability to do anything else. So these are the two reasons.
(05:07) Prakash: And you think the inability of investors to see the picture in technology startups, is it unique to India or you feel it exists even outside of India?
(05:20) Manish: I think it's a evolution curve, right? It helps to sometimes see a country's macro over a 10 year period, right? So right now we are talking about 2025. Today Deep Tech is not a scary word. In fact, everybody is singing Deep Tech, whether you understand technology or not. 2015 it was a scary word. 2005 it was not even known. Right? So it's an evolution curve. I think one thing I would say is slightly different than in other countries. See, India has will find its own path. If we keep comparing ourselves to other countries, I think fundamentally we will not do right thing for how to grow India based on its strength. Defence and Deep Tech typically go hand in hand. Now you can see how much how much emphasis government is putting in opening up defence grants for Deep Tech companies. So we are now at an inflection point where in 10 years later in 2025, if we happen to be talking, this conversation will not be meaningful because there's no difference in Deep Tech, right? I think it'll be very, very par for the course. So in my opinion it's a evolutionary curve of any country.
(06:47) Prakash: And you think defence and Deep Tech being similar is going to happen over time, or you feel the convergence has already happened?
(06:59) Manish: They work with each other. Defence drives the Deep Tech, right? It's not that they are similar. Most of the technologies that defence needs to be ahead of the curve drives the Deep Tech ecosystem of any country, right? Defence typically becomes the first buyer of something fundamentally different, right? And then they have grant structure, etc to promote innovation. Right? So essentially that's the synergy between them. If your defence is not forward looking, then it's hard to incubate a Deep Tech ecosystem in a country.
(07:39) Prakash: So, let me wind the clock back to where you started, right, or close to where you started, and we met at that time as well. Your fund was an AI focused fund. And now if I look at your website and the portfolio you have, it is alternative protein, 3D printed rocket, very cool company, Agnikul. You have fast charging batteries, cryptocurrencies and what not. So what binds all of these portfolio companies together? What is the broad theme? And has your investment thesis, has it related to that changed or evolved?
(08:24) Manish: Yes, it has evolved. I think what you see is our own journey. Back in 2016 when we started, we felt AI will change the world. And therefore went headlong into AI when AI was very early in the market, right? And as we went along making those investments, we realized that these are not just AI investments. They are disruptive AI investments, means they have built a technology which is non-trivial, right, within AI as well. So step by step we discovered who we are, right? So we actually slowly discovered that we are not an AI fund, we are a disruptive AI fund. Then in 2018, '19, I don't know when, but something struck me and, you know, I don't know what experience, but suddenly I sort of felt that material science will change the world. Just like AI is changing the world, material science will change the world in the few years, right? And then we started looking at physical innovations. By the time the fund two came along, which is 2022, I think we were, we were quite clear in what our thesis is. It's essentially looking at disruptive technologies which can provide 10x edge to the businesses. And the technologies that we focus in and back will be a function of time. Right? So in 2016, '17, '18, AI was on the cutting edge of disruption. Today, we believe AI has gone into the incremental tech and not cutting edge anymore. Two years back, we didn't feel quantum, it was too sciencey. But now we feel it is on the cutting edge. In the few years, we should see commercialization of quantum, right? So that's how the evolution of Pi has happened that we are essentially a disruptive technology backer, but the technologies that we will focus on will be a function of time.
(10:32) Prakash: In fact, your website has bunch of great blogs, research and evolution of technologies, exactly what you mentioned on a two by two matrix, which I thought was very, very good. And it tells you as you have invested how the industry segments as well as technologies have evolved. So agree with you. It's a very, very good, summary. At the same time, when you look at the evolution of Pi Ventures, normally most of the funds in Deep Tech, including pi Ventures, I would agree that would invest in technologies of the future, take a bet on it. So do you believe in India, the way you look at it at this point in time, there are spaces or segments which are uniquely good for Indian startup founders to work in Deep Tech or semiconductor area where they can make a deep impact?
(11:32) Manish: Especially after COVID, we are not divided so much by boundaries on the map. We sort of live in a global world and a global economy. Problem statements have become common across the globe. People are willing to buy from anywhere in the world. People are willing to pay you anywhere in the world. With that globalization, the dialogue of what Indian startups can do versus US startups can do has lost its meaning. I believe we can do whatever it takes to do and whatever needs to be done for the better of the world, right? We have seen lot of innovations at the cutting edge, at the microprocessor level, high performance computing level, quantum computing, space tech is heating up in India because of support, etc. from the government as well. Material science is really heating up in terms of alternative proteins and other alternative materials. Battery tech, we get so many companies from battery tech, right? I would flip the question. I would say tell me a space in which we are not working in India, right? It'll be hard to find.
(12:53) Prakash: Oh, really? Oh, that's good to know. And do you think the Atmanirbhar Bharat or self-reliant India that is a strong initiative government has driven over past several years, has something to do with the depth and breadth of innovations you are seeing in the Deep Tech space?
(13:12) Manish: Yes and no, Prakash. I think positive side is government is waking up to what technology innovations can be done and how can we be more self-reliant. Geopolitics is such that countries, other countries are also looking at India as a China plus one strategy, right? So there are some tailwinds that help us. Unfortunately in India, just like any other government policy, what comes from the boardroom to out on the trenches, there's a lot of leakage or delay. So, yes, it has helped in some way, but have we done the best out of that initiative? I would say no, just like any other leakage in our country. Not our all our taxes go back to us in a positive way. Similarly all these initiatives have a lot of loss in the entire value chain. If we can minimize that loss, you will see an uplift of this country like nobody else.
(14:17) Prakash: So what are one or two or three things you would suggest as ways to stem it and make it more impactful?
(14:29) Manish: The initiatives from the government, did you mean that? I think positive side is good initiatives, right? I've seen some really good quantum mission, very good initiative. There is a talk of iDEX, iDEX grants, fantastic initiative, right? We need to think about it in two different segments, I believe so, right? One is can we foster more innovation? Right? Not think about how we scale innovation, we think about fundamentally fostering innovation. Why that is important is, if we have more experiments going in the ground, there will be a natural failure rate, but more companies which have mettle will come up. Today there is no dearth of funding in this country. If you are doing something meaningful, you will be able to raise money and move forward, right? Without support from government, I'm saying. Government can support, but I'm saying that let us say that government, no support, even then if you are doing something meaningful, you will raise private money. Money is available. We have to increase the base of this innovation. How do we do that? I think we need to create lot more business-oriented research in universities. We need to create literally tinker houses which are effective across these universities where startups can go, utilize some of their infrastructure, work on their idea, move forward. We need to create mini grant structure rather than big grant structure, right? 10 lakhs, 15 lakhs should be easy for them to get to do experiments rather than thinking about a crore or two crore. So I am saying that if as a government we address the grassroots level innovation more than the scale innovation as a first piece, I think we will leap forward. Then you come at the scale innovation because if you are looking at the grassroots innovation, let's say you're doing 10x there, I think private funding will take the scale and you will not miss that bus. You can do always do more there, but can we address the grassroots in a more effective way? And of course, cut down the red tape. I think red tape kills us, right? Our policies sometimes are positive, sometimes are retrograde. I have seen companies where they've got grants from technology boards, etc. but it takes a year, two years to get that money in the company. Year or two year is a very long time for a startup journey, right? Founders still want to register their company abroad rather than India because the red tape in India is so hard for the managing an India headquarter company has its own overheads. So we are leaking IP. We are somewhere leaking exits as well. With some of these listings becomes easy, some of these companies are now flipping back, which is you know, good thing to see. So there is some change in the mix. But if we can just do some of these basic things right, we don't have to do something out of the world. We got to do our basic day-to-day stuff right and with more efficiency, I think we will be a different country altogether.
(17:53) Prakash: I think the foundation can play such a big role in broader innovation or scale innovation at a later stage. And a related question in that space, especially when it comes to Deep Tech, the innovation cycles are long, patient capital is required, supply chains are very complex. And US is one of the countries I've observed, has done pretty well, based on history in terms of investing or shaping through R&D the markets. So you would look at search or you would look at GPS or several other technologies including outside of tech, even in the healthcare space have been driven by US government's R&D. So when you look at India in that context, what are the kind of things versus the government as compared to a VC where funding cycles are shorter, you could collaborate on to make a bigger impact in the Deep Tech space.
(18:55) Manish: I think am of the view that government should not get involved in equity funding. Now, this is a controversial view, not subscribed by many. But I think that changes the entire equation of how things happen. I'm more of a view of that these, this money should be made available for grants or in certain cases and there can be various categories of grant. Like innovation grant comes as a grant, you burn that money, you don't owe anything back. A scale grant could come as a soft loan without collateral with some payment terms which are easy for startups to manage, right? So there are various ways to manage that capital. If we can address some of those, like, and and I should say that there are already some of these things happening, like iDEX has a matching grant. There is a big grant by that, you know, BIRAC does, etc. Some of this is there here and there. But essentially if we if we leave the equity funding to private venture funds, but do alterative capital funding in these forms, in a way, I think that would be a better win-win scenario for the private investors, government and the founders. Some of it is happening, not enough and not in enough structured.
(20:34) Prakash: The model you're suggesting does it help bridge some of the R&D intensity issues we have had, right? So 0.7% of GDP is spent on R&D, very low. So the model structure of, uh, equity investment being VC led and kind of creative grants being government led is a model that can help that R&D intensity to go up.
(21:01) Manish: I think definitely for startups it will help. I think the additional things that help is how can we tap into corporates in a more effective way, right? There is literally no incentive for companies in India to buy another companies, right? In fact, some of the big corporates go and buy companies outside India, right? We keep hearing those news. Can we create an incentive structure, tax breaks, to buy technology within India, right? Then this whole piece will move much faster, right? We, we have a problem of angel tax. It should be the reverse, right? You should get a benefit for investing in technology rather than being taxed for it. So, some of those things can help to flywheel the R&D part, right? So currently Prakash, and I could be wrong, my belief is that only startups innovate in India. Government sector does some part in ISRO, DRDO, etc. Of course, they do that for the defence. But big companies don't innovate in India. That contribution of theirs to the innovation is very low comparatively speaking and I think that part needs to be addressed somehow.
(22:21) Prakash: Yeah, in fact, we just spoke with Dr. Anandkumar who runs a drug research company out of India, Bugworks, and he was pretty much summarizing in a different way the same thing what you're mentioning, which means even the acquisitions, even the cash infusion from large companies into startups within India is not a lot. It can go up.
(22:48) Manish: It's not a lot.
(22:49) Prakash: Yeah. So which is also a function of innovation that they are driving within or R&D that they are driving within. And do you think the Anusandhan National Research Foundation, the grant of 1 lakh crores will change it or what do you believe could be the upside of a grant like that?
(23:12) Manish: It has some good structure. It will come down to execution. Right? Are we making it available for the right causes? Are we funding enough PhDs which are commercial oriented? I think that's where we lose our game, right? The government policies typically, these initiatives are all well meaning and well positioned, most of them, but poorly executed on ground, right? That's where we lose it. So if we can execute it, yeah, it will definitely help.
(23:44) Prakash: So from that point of view, venture capital companies or funds like yourself, what role do you believe they should be playing? Is it just focused on startups and helping founders to make the industry connection, product market fit, or you should also be focused on government policy, engagements with the government to make sure that we are all marching in the same direction?
(24:17) Manish: I think, again, I will probably say something which is sort of controversial if you were, but fundamental aim of a venture capital investor is to invest money. Period. The help that we end up doing to our founders is accidental and should be accidental, right? It will separate some good venture funds from the others if you are able to help or not help. But what do we fundamentally exist for? We fundamentally exist for making investments and harvesting returns and making money for our investors and in the process, according to your thesis, progress that thesis. If you are a Deep Tech fund, let's push the envelope on the Deep Tech. If you're a consumer fund, let's push the envelope on the brands, right? All these funds are required with different focuses. That's what funds should focus on. Whether fund should get involved in policy decision making, funds are already involved in consultations, right? I have been on meetings where government has been inviting some of us to talk to. And there is representation from IVCA as well in different forums, right? So I think beyond that, funds getting involved deeper in policy making will be hard because you're busy in your day job, number one job, right? You can't take out that much time. You can provide consultation, you can provide feedback, but you can't own those things. What would be good to see is to see if some people from the venture industry once they retire from their day job, if they're willing to go and join the government and do some things for them in this sector and government welcomes them, I think that will be very useful because folks from this industry will bring all that experience which can help this.
(26:13) Prakash: Your fund and your commitment to your stakeholders who have supported you with the fund is your primary objective and it does take a lot of work. Yeah.
(26:25) Prakash: So let me take a quick segue into a set of quick questions or a rapid fire session with you, Manish, just to make it a bit more fun. And we can come back to asking you different things about venture and Deep Tech. Is that okay with you?
(26:41) Manish: I'll do my best.
(26:42) Prakash: Okay. So the first question, the most underrated technology in chips and Deep Tech.
(26:52) Manish: I think different substrates for chip technologies.
(27:00) Prakash: Okay.
(27:01) Manish: And, I think, okay, it's a quick fire, but I have to say that material science is often ignored, but just like AI forms your sort of an almost like an underlying theme in the new age software, right? Material science forms that underlying theme of innovation for all physical startups. So I would actually, sort of say, if I have to say one word, it's not a direct answer, but material science is the real answer in my head for that question.
(27:35) Prakash: Yeah, good point. Especially going to be transformed, I feel, with AI, the possibility of materials.
(27:46) Prakash: Best kind of risk to take?
(27:47) Manish: Best kind of risk is that it should, I mean, it should not feel like a risk. That's the best kind of risk to take.
(27:57) Prakash: But one know whether it's in hindsight or as you take it.
(28:02) Manish: I think,as you take it, if you're so excited about, I'm again talking in context of venture capital here, right? So what is the context here? Let's say I'm investing in a company which feels very risky, right? To my mind. Or it's a very cutting-edge technology, unproven. If my conviction is super high and my excitement for that is super high, it will not feel like a risk. It's like a founder launching a startup. It's hard. That's a risk that a founder is taking, but they're not taking it thinking it's a risk. They're seeing the opportunity part of it. That's what I mean that it should be a risk that it doesn't feel like a risk. It should be, oh wow, let's do this.
(28:51) Prakash: A walk in the park. Yeah.
(28:54) Prakash: One word to describe India's Deep Tech future.
(28:58) Manish: Deep.
(29:02) Prakash: Good one. CPU or GPU for the future?
(29:07) Manish: I don't think there is one answer to this. I think there is a lot more to this. Both will exist depending upon different applications and some more alternative high-performance architectures will come. They are coming, which will be suitable. So I think probably five years later you will be asking choose between the next five, right? CPU, GPU, accelerator of this kind, optical compute, quantum compute, I don't know. There will be so many things are coming come up and each will serve a distinct need in a very distinct way.
(29:43) Prakash: Good answer. Global market first or India market first?
(29:47) Manish: There are no boundaries in the world anymore. It's always global. India is part of the globe.
(29:52) Prakash: Okay, so let's get back to talking Deep Tech.
(29:56) Manish: Alright.
(29:57) Prakash: So, one of the observations and data backs it as well is India has a very large pool of semiconductor design talent, right? One in five, 20% or so resides in India. But when you look at investible opportunities in the chip design space, it is less as compared to the opportunity that India provides. And obviously it can get better. So when you look from a venture fund point of view, investing in semiconductor, what are the most interesting options for you? Is it like materials you talked about? Is it design? Is it fabrication? Is it all or some?
(30:39) Manish: It could be one of them or multiple of them. So let me unpack three, four observations in this question. First observation is, we have to factor in the evolution. 10 years back you would ask the same question in product startups. We have so many GCCs, so many software engineers, why are we not launching enough product startups?
(31:05) Prakash: Right.
(31:06) Manish: What is the difference in that question and this question? It's the same question, just 10 years apart. I don't think you will be asking me this question 10 years later. It's just an evolution. And the evolution is that multinationals have done a great job in training our engineering force which unfortunately our universities don't do well. And they, some of them then take the plunge and become entrepreneurs. Right? And then then that system grows. We are seeing that evolution in semiconductor in the last five years. So there are innovations happening on materials, alternative materials, there is happening on alternative architectures of computing. There are innovations happening on making your own sort of ASICs for different applications in IoT, etc. So there are innovations happening in all the directions, right? Now, what we will invest in is not sort of direction led, but value led. What I mean by that is if we can find irrespective of which dimension this is, either it's a computing architecture or an alternative chemistry or alternative substrates or a different sort of an ASIC for different application, I think fundamentally we will look at, okay, whatever you're doing, is it making a 10x difference to what is out there? In in the old framework we have, we call it new product in an old market. Is it really that disruptive that people are going to move from their solutions and take you? If that equation is answered well, we will do it. So we backed two semiconductor companies. One is Quanfluence, which is making a quantum computer using light. But before they get to computer, quantum computer, they have something called an Ising machine, which is a very smart innovation between classical compute and optical compute, and it can actually run several NP-hard problems in a much more efficient way than classical computers. So it's a nice technology sitting in the chasm before quantum computing comes mainstream. So we felt that okay, there is a some fit over there, right, in terms of market and need. We've also backed Lightspeed Photonics which essentially makes transceivers for data to optical connect, which are very small, really tiny, power point and form factor wise. And therefore, they can be used to make better QSFPs or so many other interconnects which are required for the photonic interconnects, right? So, there also we felt that the timing is right for such an innovation where data centers are heating up, they need better heat, power equations on their connectors, etc, right? So, it really depends upon where this 10x value we can see on the existing problem.
(34:22) Prakash: One specific thing I wanted to deep dive on when it comes to semiconductor opportunities in India, Manish, and last few years have been just an insane breakneck speed of AI and compute as it relates to AI, right? So when you look at opportunities like AI, given chip design talent is so pervasive in India, do you believe there are interesting opportunities in the edge AI space or accelerator space or any such technology that can be built in India, designed in India and manufactured potentially in India and for the world?
(35:04) Manish: No doubt about that, right? So we have actually met companies in the various things you outlined, edge compute, high-performance compute. We've actually met quite a few companies which are taking different parts to high-performance compute, different architectures, etc. And all these are now getting done in India, right? From a design perspective, implementation perspective. Now realization I don't know because it is, we don't still have the foundries to the level we want. So that that's probably a function of time, but the other part of design and getting it done architecturally is being done here.
(35:48) Prakash: One part, obviously makes it difficult for semiconductor startups is just the ticket sizes of chip design, especially in AI, is just gone up. In general, the chip design, quantum of money needed to design a chip has been going up significantly given the node, the new technology needed to build on it is also very expensive. So you think the ticket sizes of venture funds as well as grants from the government can support such chip design products or projects, sorry in India?
(36:24) Manish: It's changing. It was very hard two years back, but we have seen now, if you have a good idea, good founding team, etc., very few companies have not been able to raise the money that they need. And then there is DLI scheme as well. I think it's called DLI only, where the government supports, right? So I think semiconductor is on an evolutionary curve, right? We are on the right curve. As with anything, we can accelerate our curves, and that's where I think we can probably do some work, but we are not on a downward curve. We are on an upward curve.
(37:09) Prakash: So switching gears a bit on the audience listening in, right? Many of them would be entrepreneurs, focused on Deep Tech, including semiconductors. So, what according to you are the must-have qualities for an entrepreneur in this space that a Deep Tech venture fund founder like you will stand up and pay attention to?
(37:39) Manish: I think, couple of things maybe, right? As an observation, one is how much are you in love with your own technology and how much can you separate from it? Contradictory thoughts, but very important, right? So, first part of it means that how well you understand your innovation, how deeply you believe in it, etc. At the same time, the second thought is important. Can you step away from it and see whether it is needed in the world? And to whom it will make a difference. Will it make an incremental difference to somebody's life or will it make a disruptive difference, what we call as a 10x difference to somebody's life, right? If founder can carry these two contradictory thoughts in their mind and still have the energy to go 100 miles an hour every day, then you got a Deep Tech founder.
(38:42) Prakash: So will that also be your advice to a graduate coming out of a college in India or an early stage entrepreneur in Deep Tech on what they need to do to be successful in this space?
(38:56) Manish: Absolutely. I think that is important. And if it is sounding too sort of difficult to follow, I would say that build a business narrative for your technology, right? And we have seen that founders who are able to transition from a technology narrative to a business narrative in their early part of their journey, right, they would probably build a more customer-centric Deep Tech startup rather than otherwise. Else what you get is you build a technology, then you're looking for a use case. That is not an optimal journey for a Deep Tech founder.
(39:32) Prakash: Do you have one or two examples you can share where people have done it really well to bring it to life for our audience?
(39:41) Manish: Of course, I think most of our founders have done it. For example, Agnikul is one scaled company that we can see today, right? When we first met them, it was all about 3D printed rocket engines, right? That's the technology innovation. And you could say, who cares?
(40:03) Manish: But who cares answer is that okay, if you can do this, then you can build smaller rockets. And if you can build smaller rockets, smaller payloads can go to space on their terms, which today they are on a mercy of right share. I think this narrative was very clear in Srinath's and Moin's mind when they talked to us. So, that insight was very important for them also and for us also to back them, right? So yeah, that's one example maybe.
(40:38) Prakash: Look forward to having Agnikul founders on this show also at some stage.
(40:42) Manish: Yes, absolutely. You should reach out to them.
(40:45) Prakash: We come to the last question, Manish, that I plan to ask all the guests, which is as follows. The Deep Tech journey for India is not only domestic growth. And you talked a bit about it. The world is our oyster. So, it is India's position or vantage point in the global map of Deep Tech. So, when I ask you the question 15, 20 years from now, what is your vision of India's place in the Deep Tech or semiconductor map and what we need to do today to make that vision a reality?
(41:23) Manish: I have actually no doubt in my head or in my mind that India will be absolutely in the center of the Deep Tech map of the world in a decade from now. Whether it happens in five years, 10 years, 15 years, that we can debate. But today when you talk about Deep Tech, first country comes to your mind is US, maybe Israel, maybe China, right? India doesn't come today. I think it will be right there in the middle of it. So that's what I believe we hold as a potential, the entire ecosystem that is evolving and developing and taking roots. What can we do differently to accelerate it? I think quite a bit is happening. I can see a lot more tailwind in the last one year on Deep Tech than it was before. Almost every venture fund is now sort of venturing into harder technologies. Defence is opened up quite a bit. And I've said this before, defence and Deep Tech go hand in hand in most countries. So that is very critical piece. What we need to do is to simplify, and this is a broken record, right? It's a broken record. Everybody keeps saying that. Things are just difficult to do in India, right? It's difficult to get a driving license. It's now it's becomes slightly easier to get a passport done, right? But just basic needs of something, it's difficult to get from home to office. That's why we are chatting on Zoom, right? Our basic things, day-to-day things are difficult to do in India. Can we make them easy? Can we make them so easy that founders first choice is actually to headquarter a company in India rather than US? Can we make it easy for angel investors to invest in companies and get benefit from it rather than getting taxed for it? Can we do simple things right? That's all we need to do.
(43:32) Prakash: Great set of observations and recommendations. So, Manish, we have come to the end of the show. Is there anything that we haven't covered that you think we should?
(43:46) Manish: I think sorted. Yep.
(43:49) Prakash: Okay. So thank you for your time, Manish. I know you're very, very busy. So very, very appreciative of you taking the time to be on the show.
(43:59) Manish: Thank you Prakash. Thank you so much.
(44:01) Prakash: Thank you. And for our viewers, please subscribe to our Chai & Chips channel, whichever channel you watch it on. Please give us feedback on how we can do better, what kind of topics you want to listen to, who you want on the show. Look forward to listening from you. Thank you.