India Accelerator’s Ashish Bhatia On Why Defence & Deeptech Are The New Alpha

Ashish Bhatia shared how India Accelerator (IA) is backing resilient founders building sovereign, infrastructure-led businesses in defence, AI, mobility and advanced hardware

With 29 deals and ₹250 Cr deployed in 2025, IA and Finvolve are doubling down on capital efficiency and revenue quality, while expanding into Saudi Arabia

As growth-at-any-cost fades, IA is prioritising recurring revenue, retention and real deployment cycles, especially in strategic sectors where procurement, IP depth and long build cycles define durable value

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Over the past decade, India’s startup ecosystem has evolved from being a capital-starved, metro-centric experiment to a far more inclusive and stable market, driving investor interest and global attention. 

Liquidity events have created a new cohort of experienced second-time founders, as domestic and global capital flows deepen, and policy boosts such as production-linked incentives and semiconductor and defence pushes are defining where the next wave of value could emerge. 

The funding ecosystem itself has a story of evolution. In 2025, Indian startups raised more than $11 Bn from over 936 deals. The overall funding, however, declined 8% from the level reached in 2024. Capital deployment became more disciplined, particularly at the growth stage, where funding rose to $4 Bn in 2025, up from $3.5 Bn a year back.

After two years of macroeconomic headwinds, supply chain shocks, and geopolitical uncertainties, compounded by post-COVID capital corrections, 2025 marked a year of valuation reset. Investor confidence has stabilised, with over 90% of investors planning to deploy capital this year.

Strategic sectors such as defence tech, applied AI, clean energy, and advanced hardware are seeing rapid capital allocations. These shifts reflect more capital infusion and a broader recognition that India’s next wave of breakout companies may look structurally different from the first. 

But this maturity has brought sharper scrutiny. Growth at any cost has given way to questions around capital efficiency, governance, and revenue quality. Investors are rethinking their strategies, and founders are building in sectors that are harder, deeper, and often infrastructure-led, from defence and drones to semiconductors, applied AI, and energy systems. 

Few investors have had a ringside view of this evolution across stages and geographies as closely as Ashish Bhatia, CEO of India Accelerator and cofounder of Finvolve, a  multi-stage VC Fund. He has backed companies across deeptech, mobility, defence, AI and consumer sectors, while also expanding India Accelerator’s footprint into markets like Saudi Arabia. 

To understand how the investment philosophy is evolving in India, Inc42 reached out to Bhatia. In a freewheeling conversation, he unpacked India Accelerator’s roadmap for 2026, spoke of the emerging trends in the Indian startup ecosystem, and shared his views on the key highlights from the recent Union Budget. 

Here are the edited excerpts from the interview…

Inc42: Being a multi-stage tech VC, how has your investment philosophy evolved over the years as the ecosystem matured? 

Ashish Bhatia: When we started, the Indian startup ecosystem was capital-constrained, exits were aspirational and most founders were solving deeply local problems. Today, the ambition is global, capital has matured, and liquidity events have created a new generation of experienced entrepreneurs. Naturally, our philosophy has had to evolve with this shift. Earlier, the focus was largely on market size. Over time, one truth has become clear: outcomes are disproportionately shaped by the founders. Markets evolve, models pivot, but resilient founders consistently survive and thrive. Today, we back founders who can compound opportunity over time. That’s also why our multi-stage strategy exists, to keep doubling down on conviction as companies mature.

Geographically, we’ve moved beyond traditional hubs. We’ve built presence across Tier II and Tier III cities, where we’re seeing sharp execution and disciplined capital use. For us, local access isn’t just sourcing, it’s an unfair advantage in building long-term conviction. Managing a multi-stage platform means constantly recalibrating the investment lens. At the seed stage, we bet on people and their ability to learn fast and navigate uncertainty.........

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