A coalition of leading U.S. and Indian venture capital (VC) firms has announced the launch of a $1 billion funding alliance focused exclusively on backing India’s deep-tech startups—marking one of the largest cross-border investment partnerships ever dedicated to the country’s innovation ecosystem. The initiative, named the U.S.-India DeepTech Alliance (USIDA), aims to accelerate growth in high-potential sectors like artificial intelligence (AI), semiconductor design, renewable energy tech, quantum computing, and advanced manufacturing, where India has emerged as a hub for technical talent but often faces gaps in early-stage and growth capital.
The alliance brings together 12 prominent VC players from both nations. U.S. participants include Sequoia Capital U.S., Andreessen Horowitz (a16z), and Breakthrough Energy Ventures—firms with a track record of funding transformative deep-tech globally—while Indian partners feature homegrown leaders such as Accel India, Nexus Venture Partners, and Blume Ventures, which have deep roots in the local startup landscape. The $1 billion pool will be split evenly between U.S. and Indian investors, with each side committing $500 million to co-invest in startups across seed, Series A, and Series B stages.
According to a joint statement from the alliance, the funding will prioritize startups that combine technical innovation with scalable business models—particularly those addressing India’s unique challenges while holding global market potential. For example, the alliance will target AI startups building solutions for agriculture tech (such as precision farming tools) or healthcare diagnostics, semiconductor firms developing chips tailored for low-power devices (critical for India’s growing smartphone and IoT markets), and renewable energy startups creating affordable solar or wind tech for rural areas.
Beyond capital, the USIDA will offer startups access to a cross-border network of mentors, technical advisors, and corporate partners. U.S. VCs will connect Indian founders with global markets, including access to Silicon Valley’s tech ecosystem and potential customers in North America, while Indian firms will provide on-the-ground support—navigating local regulations, building domestic supply chains, and tapping into India’s talent pool of engineers and researchers (India produces over 1.5 million engineering graduates annually, per government data).
The launch of the alliance comes at a pivotal moment for India’s deep-tech sector. While the country’s startup ecosystem has boomed in recent years—with over 100 unicorns (startups valued at $1 billion+) as of 2025—deep-tech startups have historically lagged behind consumer tech or e-commerce firms in funding. A 2024 report from NASSCOM (India’s IT industry body) found that deep-tech startups received just 12% of total VC funding in India, compared to 35% for consumer tech. Investors often cite longer development timelines, higher technical risks, and the need for specialized expertise as barriers to backing deep-tech.
The USIDA seeks to address these gaps by de-risking investments through collaborative due diligence and shared expertise. “India has the talent to lead the next wave of deep-tech innovation, but it needs patient capital and global partnerships to scale,” said Roelof Botha, Managing Partner at Sequoia Capital U.S. “This alliance combines the best of U.S. deep-tech investing experience with India’s on-the-ground insights—creating a platform that can turn promising ideas into global companies.”
Indian partners echoed this sentiment, emphasizing the alliance’s role in boosting India’s self-reliance in critical tech sectors. “For too long, India’s deep-tech startups have had to look outside the country for growth capital and expertise,” said Mukul Singhal, Co-Founder of Nexus Venture Partners. “The USIDA changes that by creating a local pool of capital backed by global credibility—helping startups build for India first, then expand to the world.”
The alliance has already identified its first batch of potential investments, including a Bengaluru-based semiconductor design startup and a Delhi-NCR AI firm focused on climate modeling. The first round of funding is expected to be disbursed by the end of 2025, with the alliance targeting 50–60 startups over the next five years.
Industry analysts see the USIDA as a catalyst for India’s broader tech ambitions. “This $1 billion alliance is more than just funding—it’s a vote of confidence in India’s deep-tech potential,” said Kiran Mazumdar-Shaw, Chairperson of Biocon and a leading Indian business leader. “By aligning U.S. capital with Indian talent, it can help India become a global hub for deep-tech innovation, not just a market for foreign tech.”
As the alliance gets underway, it also aims to advocate for policy support—such as tax incentives for deep-tech investments and streamlined regulations for tech startups—to further strengthen India’s innovation ecosystem. For U.S. and Indian VCs alike, the USIDA represents a strategic bet that India’s deep-tech sector will be a key driver of global tech growth in the next decade.