New opportunities in deeptech: AI, ML and SpaceTech

By Jatin Desai

Deeptech encompasses companies that employ cutting-edge technology to tackle complex problems and have the potential to have a deep impact on society. TechWorks defines it as “technology based on tangible engineering innovation or scientific advances and discoveries.” Its primary focus is finding innovative solutions to society’s most pressing issues. It can address a wide range of problems, including global health crises, space exploration, climate change, and energy crises.

Within the realm of Deeptech, three emerging fields have garnered significant attention and hold immense promise for the future: Artificial Intelligence (AI), Machine Learning (ML), and SpaceTech. These fields are increasingly being utilized by numerous startups across the globe and in India.

Artificial Intelligence (AI) has been making waves globally, revolutionising various industries such as healthcare, finance, and transportation. In India, the AI sector has witnessed significant growth, with startups offering AI-based products raising a staggering $1.1 billion in 2022 alone, as reported by data acquired from Analytics India Magazine. This remarkable funding is a testament to the potential of AI in addressing complex problems and transforming industries. The Covid-19 pandemic compelled companies to adopt a remote work model, prompting them to explore the integration of AI in their day-to-day operations to automate various business processes. As a result, there is a growing demand for startups equipped with AI capabilities, as companies seek to enhance their products and services to better serve a wider customer base and reduce operation costs. An interesting example of this is the recent case of Dukaan laying off 90% of their support staff after introducing an AI chatbot.

Machine Learning (ML), a subset of AI, focuses on the development of algorithms and models that enable computers to learn from data without explicit programming. ML algorithms have found diverse applications in the field of deeptech. For instance, in healthcare, ML algorithms can analyze medical images, aiding in the early detection of diseases and facilitating accurate diagnoses. The ability of ML to analyze large datasets, detect patterns, and make predictions is invaluable in solving complex problems across various sectors.

SpaceTech, which encompasses the use of technology and systems for space exploration, satellite communications, and Earth observation, is another promising field within deeptech. Advancements in SpaceTech have not only expanded our understanding of the universe but have also opened up new possibilities for exploration and innovation. In 2022, the SpaceTech sector witnessed significant growth, achieving remarkable funding and reaching important milestones. This positive trend indicates the increasing interest and potential within the industry.

In India, several startups are capitalizing on the opportunities presented by AI, ML, and SpaceTech. Startups like Skyroot and Pixel have already launched their initial product versions, while Agnikul successfully carried out a  test launch this year. Our portfolio company Bellatrix Aerospace also has multiple launches planned to test satellite engines this year. Bellatrix also had its test flight as part of ISROs poem platform. These startups have achieved significant milestones and are attracting substantial investments, reflecting the confidence and support from the Indian community and the government.

In the last couple of years, the government has taken a keen interest in developing our SpaceTech capabilities. With supportive policy and infrastructure measures like the establishment of IN-SPACe (Indian National Space Promotion and Authorization Center) has had a substantial influence on the space sector and associated enterprises, while also providing a clear framework for drone policies. Additionally, the DGCA (Directorate General of Civil Aviation) has initiated the development of a policy framework to regulate the operation of flying taxis. ISRO (Indian Space Research Organization) has also taken a commendable step by opening its facilities for private launch and testing purposes, facilitating the growth and development of space startups. The government has also opened up the sector to private players which has further increased investment interest in this area.

A very interesting trend we see is the convergence of AI and ML in SpaceTech where it can pave the way for groundbreaking advancements. AI algorithms are already being utilized to study vast amounts of spatial data, including images, signals, and telemetry. This enables scientists to uncover new celestial objects, investigate cosmic phenomena, and gain valuable insights into the origins of the universe. The potential applications of AI and ML in SpaceTech are vast and hold the key to unlocking new frontiers in space exploration and understanding.

India is emerging as a hotbed for cutting-edge deeptech startups, showcasing the immense potential to develop innovative products and services. These startups are not only focused on catering to the domestic market but are also eyeing global opportunities. By leveraging technologies like AI, analytics, augmented reality/virtual reality, and the Internet of Things (IoT), among others, Indian startups are making their mark on the international stage. According to recent reports, India recorded around 3000 deeptech startups in 2021, representing approximately 12 percent of the country’s overall entrepreneurial ecosystem and activity in this area has only gone up since then. Out of these, around 500 startups boast patented solutions and a higher concentration of employees with deep tech skills. This signifies the vibrancy and inventiveness of the Indian deeptech landscape, making it a compelling destination for venture capital investments.

The author is co-founder, managing partner, Inflexor Ventures

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