Deep tech needs different rules · Bhaskar Majumdar

The brief

The argument in sixty seconds

No VC writes deep tech's first cheque: a space or chip startup needs costly equipment before it has a product. So its founders are either veterans funding themselves or researchers inside institutes that own the kit. IITM Unicorn Frontier Fund I is built to reach the second group early — it invests across India, with sight of IIT Madras labs before their research becomes companies. Majumdar's rules follow: back domain knowledge, not a felt pain point; price on technical milestones, not cash flows; invest where other VCs are not; staff the firm with PhDs; raise from LPs who can wait 12 years.

The rules, drawn

Six charts, thirteen minutes

Fund figures come from the first-close announcement and the fund's launch release; everything else is as said on air. Click ▶ to hear it.

The fund at first close

₹ crore · first-close announcement, 26 September 2026

Size

How the corpus is used

First four cheques · ₹55 Cr

Space tech

Hathor

Semi-cryogenic and cryogenic rocket engines

Quantum

Quanastra

Single-photon detection systems

Batteries

Triolt Energy

Lithium-ion cells for drones and fast-charging e-mobility

Carbon capture

Carbelim

Microalgae-based carbon capture and air purification

From IIT Madras, IIT Madras Research Park and Unicorn India Ventures. First cheques average ₹8–10 crore. On air they take 20–25% of the corpus — "the 25 might increase to 30"; the fund's launch release puts about 60% into building the portfolio.▶ 2:09 ▶ 7:33 ▶ 10:39

The first cheque nobody writes

who funds deep tech before there is proof

He expects more deep tech startups to come out of institutes of excellence. IIT Madras alumni joined as LPs: money "is one part of it, but the knowledge that they bring into the fund is very deep".▶ 1:16 ▶ 1:44 ▶ 2:21

Go where the VCs aren't

● portfolio city named on air ○ big three metros (the other third)

Two-thirds of investments sit outside the three metros, his figure. Metro founders chased the "flavour of the month"; tier-2 cities did long-term engineering. Fewer VCs mean better entry prices. Map shows boundaries as recognised by India.▶ 5:40 ▶ 6:35 ▶ 7:15

Price milestones, not cash flows

one chip startup's valuation, ₹ crore

With no cash flow, DCF has nothing to discount; value jumps at milestones — tape-out for chips, a launch for space tech. His auditors "just couldn't understand", so he walked them through the TRL cycle.▶ 3:50 ▶ 9:56 ▶ 10:20

Raise from LPs who can wait

fund life, years

LPs once panicked at a seven-year cycle; now some ask why the firm exits a company just as it matures. Smaller tickets, he believes, face more pressure for liquidity — so this fund focused on larger family offices and institutions.▶ 11:50 ▶ 12:05 ▶ 12:29

Two ecosystems, two DNAs

deep tech against consumer internet, as he draws the line

Consumer internet

Deep tech

Starts from
▶ 1:05

A room — as Flipkart did

Zero-gravity rigs, chip toolkits

Founder signal
▶ 4:11

Lived the pain point

Research or working knowledge, pedigree

Analyst bench
▶ 9:05

Young engineers, MBAs from consulting and banks

PhDs with domain expertise

Founder DNA, VC DNA, go-to-market and exits all differ, he says. The standard analyst route is "very good for fintech, consumer internet businesses"; for deep tech the firm now recruits PhDs.▶ 8:36 ▶ 9:34

Worth keeping

Lines that stay

Deep tech, unlike the other areas, is not a gut-feel business.

Bhaskar Majumdar ▶ 0:17

Now you don't even know where the players are coming from.

Bhaskar Majumdar, on Indian cricket and Indian startups ▶ 6:08

Chapters

Where the conversation travels

Every block is a chapter, coloured by what it's about. Click any of it to jump straight to that minute on YouTube.

Deep tech & hardwareVenture capitalIndia macroHiring & talentClimate & energy

01Deep tech needs different rules 0:00 02A fund born inside a university 0:36 03Not a gut-feel business 3:38 04Beyond Bombay, Bangalore and Delhi 5:00 05Build the portfolio, back the winners 7:30 06Two ecosystems, two DNAs 8:12 07Valuing what has no cash flow yet 9:45 08From measuring air to cleaning it 10:36 09Keeping investors patient 11:44

Glossary

The jargon, unpacked

Greenshoe

An option to raise more than a fund's base size if demand allows.

LP

Limited partner: an investor in the fund (family office, institution, alumnus), as opposed to the firm that manages it.

DCF

Discounted cash flow: valuing a company by the present value of its expected future cash flows.

TRL

Technology readiness level: a scale from 1 (basic research) to 9 (proven in operation). The fund targets companies at TRL 3–4.

Tape-out

The moment a chip design is finalised and sent to the fab for manufacture.

Connections

If this resonated, go here next

EP 92 · Deep tech

Full transcript

The whole conversation, searchable

Edited captions, checked against the audio. Click a timestamp to open that moment on YouTube.