Of startups, IPOs, R&D and geopolitics- Reflection of current environment

Geopolitical disturbances, from ongoing wars in the Middle East to emerging oil and LPG crises in India, have rattled global business sentiment and cast a shadow over the Indian startup ecosystem. After a strong 2025, the sector is feeling the tremors in the current financial year. High-profile IPOs originally slated for early 2026—such as PhonePe, Reliance Geo, and NSE—have been postponed until market conditions stabilise. Against this backdrop, the Tyon Event 2026 brought together industry leaders to discuss resilience, innovation, and the path forward for India’s deep-tech ambitions.

CMD of an investment and startup finance firm struck a note of measured optimism. As a long-term investor, he emphasised that venture capital inherently operates on a 5- to 10-year period. “Such opportunities are always seen from the perspective of how do you get good investment opportunities,” he noted. While acknowledging short-term pressures from geopolitical tensions, he described these as temporary. From India’s perspective, he argued, the startup ecosystem remains robust and on an upward trajectory.

He highlighted several positive indicators: the rapid growth in the number of startups, an increasing pool of investors, and a surge in SEBI-registered funds. State governments in Odisha, Kerala, Karnataka, and others are actively supporting the sector through targeted initiatives. He pointed to the central government’s proactive role via the RDI (Research, Development and Innovation) Fund and other schemes, predicting that India would “rise much faster as compared to the global markets” over the next few years.

When asked about the postponement of IPOs, a startup consultant called it “a short-term blip.” He acknowledged some macro-level impact from tariffs, exports, and global logistics disruptions—particularly for companies heavily reliant on the US market—but noted signs of resilience. “You’re also seeing the market recovering very well,” he observed, pointing to the stock market’s quick rebound as evidence of underlying strength.

Despite being the world’s fourth-largest economy, India ranks 39th globally in innovation. A key bottleneck is its low R&D spending—just 0.65% of GDP, among the lowest for emerging economies. The private sector’s contribution remains modest at around 35%, compared to much higher figures in developed nations. Until unless the private sector will not contribute in the development of research and innovation, it will be really difficult to match the speed- was the opinion generally expressed by startup entrepreneurs and experts.

The government has responded with ambitious interventions. The RDI Fund, with a Rs 1 lakh crore corpus and Rs 20,000 crore allocated annually for the next six years, aims to catalyse private-sector participation in deep technologies. A senior scientist in a government research organization distinguished between “deep science” (fundamental research) and “deep tech” (applied translation). One expert explained: “Without deep science there is no deep tech.” Drawing parallels with the United States’ National Science Foundation model, they stressed the need for ambitious, impact-oriented science that feeds into industry breakthroughs—from CRISPR to mRNA technologies.

The discussion also underscored the importance of clear metrics and focused objectives. The Anusandhan National Research Foundation (ANRF) is preparing a white paper on appropriate evaluation frameworks, including Technology Readiness Levels (TRL). Translational centres and societal innovation hubs were proposed to bridge the gap from basic research (TRL 2) to mid-stage prototypes (TRL 5-6).

India’s deep-tech startup sector—spanning AI, space tech, robotics, and more—already numbers 7,282 companies, with 337 actively raising Series A funding. In February 2026, the government approved the Rs 10,000 crore Startup India Fund of Funds 2.0, building on the 2016 initiative to provide risk capital for AI, aerospace, and manufacturing. ANRF representatives clarified that funding begins at the pre-startup university phase through grants, while the RDI Fund targets larger, innovation-intensive projects via second-level fund managers.

Another aspect to be focussed on in this regard is family offices as providers of long-term, patient capital—especially vital for high-risk, high-reward sectors like AI, aerospace, defence and climate tech. With over 300 family offices in India managing roughly $30 billion in assets (up from just 45 in 2018), these entities are increasingly allocating to startups. Driven by a projected $1.3 trillion intergenerational wealth transfer, family offices offer not only capital but also strategic guidance and operational experience spanning generations.

A senior editor of a business journal mentioned three investment categories: pure financing, strategic additions to existing family businesses, and passion-driven financing in new-age sectors where promoters lack resources but can provide mentorship. While family offices may not fully replace traditional investment and venture capital firms—due to the specialised domain knowledge required in space tech or quantum computing—they bring additional risk capital and a willingness to accept higher mortality rates in exchange for outsized rewards.

The ultimate aim is to create institutional conditions that can productively absorb and multiply capital, fostering a self-reinforcing cycle of innovation. India’s direction is clear: a 75-year-style vision akin to the US National Science Foundation, aligned with Viksit Bharat. Short-term results may fluctuate due to geopolitics or market volatility, but the commitment to deep science, translational research, and ecosystem transformation remains unwavering.