SOURCE: AFI
Sameer Joshi, CEO of NewSpace Research and Technologies (NRT), took to X this week to spotlight a pressing challenge facing India’s aerospace and defense sector. In a pointed post tagging Union Commerce Minister Piyush Goyal, Joshi celebrated NRT’s strides in delivering deep tech and innovation but lamented the lack of patient capital for companies like his. “VCs love the food delivery guys, yes. GFR and L1 in #DeepTech also hurts…,” he wrote, urging Goyal to take note. As India aims to cement its place in the global aerospace race, Joshi’s words underscore a broader tension: the struggle of deep tech innovators to secure the long-term funding needed to soar.
NewSpace Research and Technologies, a Bengaluru-based firm founded in 2017 by Joshi and Julius Amrit, has been a trailblazer in India’s aerospace and defense landscape. The company focuses on next-generation unmanned systems, developing persistent drones for earth observation and communications that operate at altitudes of 5 to 20 km with endurance ranging from days to months. NRT’s High Altitude Pseudo Satellite (HAPS) UAV, boasting a 3+ month endurance, positions it among a handful of global competitors in cutting-edge aerospace tech. Recent achievements include a solar-powered UAV that flew continuously for 21 hours—a first for India—and setting a global record for the highest altitude flight in a multirotor system.
NRT’s work isn’t just academic. The company has delivered swarming systems to the Indian Ministry of Defence and collaborated with the Indian Army to validate technologies in wargames, integrating modern solutions with strike corps operations. A recent partnership with the U.S. Army Research Laboratory to develop intelligence and autonomy algorithms for multi-agent sensing further underscores its global ambitions. With $73.2 million raised over 11 funding rounds, including a $52 million bridge round in 2024, NRT is valued at $120 million and aims to become a unicorn within five years. But for all its promise, Joshi’s X post reveals a stark reality: deep tech innovators like NRT are struggling to secure the patient capital needed to scale.
Joshi’s frustration echoes a broader sentiment in India’s startup ecosystem. Deep tech ventures—those leveraging advanced science and engineering in fields like aerospace, AI, and robotics—require long gestation periods and heavy upfront investment. Unlike consumer tech startups (think food delivery apps like Zepto or Swiggy), which promise quicker returns, deep tech firms like NRT face a funding landscape skewed toward short-term gains. “VCs love the food delivery guys,” Joshi noted, highlighting a preference among venture capitalists for sectors with faster scalability and clearer exit paths.
This isn’t a new critique. At the Startup Mahakumbh 2025 earlier this month, Piyush Goyal himself urged Indian startups to shift focus from consumer apps to deep tech sectors like AI, robotics, and semiconductors, pointing out that India lags behind China in these areas. Goyal’s remarks drew mixed reactions—some founders defended consumer tech’s economic impact, while others, like Aman Gupta of boAt, backed the call for deeper innovation. But Joshi’s post adds a critical layer: even when companies like NRT heed the call, they’re hamstrung by a lack of “patient capital”—investors willing to wait out the 7–10-year timelines typical of aerospace and defense R&D.
Joshi’s mention of “GFR and L1” points to systemic hurdles baked into India’s procurement framework. GFR (General Financial Rules) governs public spending, often prioritizing cost over innovation. The L1 (lowest bidder) criterion, a cornerstone of government contracts, awards projects to the cheapest bidder, sidelining firms like NRT that invest heavily in R&D and may not compete on price alone. For deep tech startups in aerospace and defense, this creates a Catch-22: they need contracts to scale, but the system favors established players or low-cost alternatives, stifling innovation.
The government has taken steps to address this. Initiatives like the Innovation for Defence Excellence (iDEX) scheme have supported startups, with NRT benefiting from partnerships with the Indian Air Force, HAL, and DRDO. Goyal’s announcement of a ?10,000-crore Fund of Funds scheme at Startup Mahakumbh, with a focus on deep tech, signals intent to mobilize patient capital. Yet, as Mohandas Pai noted at the same event, India’s deep tech ecosystem still faces a funding crunch—Indian startups received $160 billion from 2014–2024, compared to China’s $845 billion. Without structural reforms to GFR and L1, deep tech firms risk being priced out of their own market.
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