Shastra VC Launches $100 Million Fund to Back India’s Deeptech, AI and Defence Startups
Bengaluru-based early-stage venture capital firm Shastra VC has launched its third fund with a corpus of $100 million (approximately ₹963 crore), marking a significant scaling up of its commitment to India’s deep technology ecosystem .
The new vehicle will invest between 500,000and500,000and3 million in IP-led startups, focusing on space technology, defence systems, artificial intelligence, and renewable sciences . The launch represents a notable expansion for the investor, which was formerly known as Veda VC and had deployed around $55 million across its first two funds .
💡 Strategic Investment Focus
Shastra VC’s Fund III is designed with a sharp focus on backing startups building intellectual property-driven solutions across multiple frontier technology sectors . The firm will target companies from seed stage to Series A and beyond, with the ability to make follow-on investments as portfolio companies scale .
Key focus areas:
| Sector | Focus Areas |
|---|---|
| Space Technology | Satellite systems, launch vehicles, ground infrastructure |
| Defence Systems | Indigenous manufacturing, radar technology, aerospace |
| Artificial Intelligence | Foundational models, specialized algorithms, domain-specific intelligence |
| Renewable Sciences | Carbon capture, alternative materials, energy storage |
Source: Shastra VC announcement
👥 The Leadership Team
Shastra VC is led by experienced entrepreneurs-turned-investors:
| Partner | Background |
|---|---|
| Vasant Rao | Co-founded Autoninja (acquired by ICICI Lombard) |
| Avijeet Alagathi | Founded BYG (acquired by Curefit); also worked at Goldman Sachs |
| Ashis Nayak | Co-founded Autoninja alongside Rao |
The firm has built an advisory network comprising former Tech Mahindra CEO CP Gurnani and former Kotak executive C. Jayaram, along with domain experts across biotech, semiconductors, climate, and space sectors . Over 30 technical champions —including founders, researchers, operators, and LPs—support the firm’s portfolio companies .
📈 Track Record and Portfolio
Shastra VC has deployed approximately 55millionacrossitsfirsttwofunds∗∗,backingover∗∗35startups∗∗andhelpingraisemorethan∗∗55millionacrossitsfirsttwofunds∗∗,backingover∗∗35startups∗∗andhelpingraisemorethan∗∗80 million in follow-on capital .
Notable portfolio companies include:
| Startup | Sector |
|---|---|
| Simplismart | AI / IoT solutions |
| Alt Carbon | Climate tech / carbon capture |
| Sisir Radar | Defence / radar systems |
| Avammune | Biotechnology |
| Sanlayan | Defence / electronics |
Beyond traditional venture capital, Shastra VC has also launched SDEX, a scholarship programme providing up to $100,000 in non-equity funding to help academic researchers commercialise their work . This aligns with the firm’s focus on IP-driven startups — over 20 patents have been filed across its portfolio, and more than 12 portfolio companies have PhDs on their founding teams .
🇮🇳 The Deeptech Moment in India
Shastra VC’s fund launch comes amid a broader surge in investor appetite for India’s deeptech ecosystem .
Key indicators of momentum:
- Deeptech funding (2025): $500 million across 87 deals — India’s third most-funded startup segment, after ecommerce and fintech
- Q1 2026: Deeptech attracted an additional $166 million
- Piper Serica recently launched the Bharat Tech Fund (₹600 crore) for semiconductors, AI, spacetech, defence tech, and biosciences
- Government policy support: Startup India benefits extended to 20 years; turnover eligibility threshold raised to ₹300 crore; tax benefits and relaxed loss carry-forward norms
🔮 The SDEX Initiative: Bridging Research and Commercialisation
A distinctive feature of Shastra VC’s approach is SDEX, a scholarship programme that helps academic researchers commercialise their work without diluting equity. The initiative provides:
- Up to $100,000 in non-equity funding for research commercialisation
- Support for filing patents and developing prototypes
- Mentorship from industry experts and technical champions
The programme reflects the firm’s recognition that India’s research institutions hold significant untapped potential for deep-tech innovation — and that bridging the gap between lab and market requires patient, patient capital .
💎 Summary
| Aspect | Details |
|---|---|
| Fund Corpus | $100 million (~₹963 crore) |
| Ticket Size | 500,000–3 million |
| Focus Sectors | Space, Defence, AI, Renewable Sciences |
| Stages | Seed to Series A and beyond |
| Total Portfolio | 35+ startups |
| Previous Deployment | $55 million (Funds I & II) |
| Advisory Network | CP Gurnani, C. Jayaram, 30+ technical champions |
| Unique Initiative | SDEX (non-equity funding for research commercialisation) |
India’s deep-tech ecosystem is at an inflection point, with a new generation of globally relevant companies being built from here. As Avijeet Alagathi, partner at Shastra VC, noted: “India is at an inflection point for deeptech, AI, and climate tech, with a new generation of globally relevant companies being built from here. These are foundational technologies that will reshape industries over the next decade” .
With this $100 million fund, Shastra VC is positioning itself to back the founders who will build those companies — not just with capital, but with the operational expertise, technical guidance, and patient partnership that deep-tech ventures require to succeed.
