Skyroot's Orbit Success Sparks Debate on Indian VC Risk Appetite

On July 18, 2026, Skyroot Aerospace's Vikram-1 placed satellites into orbit, making it the first privately developed Indian rocket to do so. Three months later, that milestone has become the backdrop for an uncomfortable question: can India's venture capital industry back the next breakthrough?

The debate was triggered on October 22 by American journalist Ashlee Vance, known for his biography of Elon Musk. After three weeks meeting 15 Indian hardware companies, he asked on X: "Why are Indian VCs so afraid to take risk and make money?" He later said he had rarely seen a market where VCs had a worse reputation among founders.

Founders push back, investors respond

Akash Kulgod, founder of Dognosis, which is developing canine-assisted cancer detection, said he spoke to about 80 investors, roughly 65% of them US-based. US investors, he said, usually decided quickly. Some Indian investors, he alleged, held repeated meetings and then demanded commercial traction or stopped responding. For medical technology, where clinical validation and regulatory approval can take years, such delays hurt. Other founders criticised reliance on IIT or IIM credentials and on the reputation of existing backers.

Investors including Antler's Nitin Sharma, Chiratae's TC Meenakshisundaram and Unacademy's Gaurav Munjal offered competing views, pointing to India's growing list of deeptech successes and the rising supply of specialist capital.

What the numbers show

In Q3 2026, Indian deeptech startups raised $290 Mn across 28 deals, against $105 Mn across 29 deals a year earlier. That is a 176% jump, compared with 5% growth for the wider startup ecosystem. But deal count slipped, and Pixxel's $100 Mn round alone made up about a third of the capital. Bengaluru captured around 65% of funding.

Early-stage funding fell 18% year on year to $164 Mn across 93 deals, even as the median cheque rose 20% to $1.2 Mn. In the first half of 2026, advanced hardware startups had raised $365 Mn across a record 66 deals, suggesting capital has since concentrated in fewer, technically validated companies.

The timing matters. As AI threatens parts of the software-services industry that built India's tech reputation, the ability to create and own foundational technology is becoming more important. The open question is whether investors will fund the experiment that proves a technology works, not only the product after it does.