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Not long ago, India’s startup scene was all about the consumer internet. A billion-strong people taking to the internet riding on smartphones made it seem like a market just about to ripen. Investors in all shapes and sizes – from newbie angels to behemothic hedge funds – raced to bet on ecommerce plays and a hundred apps mushrooming all over the country. But that lap of the investment race is over with no winners, dead or dying companies, and a funding winter.

IDG Ventures, which invested in India’s ecommerce leaders like Flipkart, Myntra, and Yatra, today launched a hunt to find and fund deep tech startups, in partnership with Bangalore-based accelerator Axilor. Virtual reality/augmented reality, space, drones, robotics, artificial intelligence, bitcoin, and blockchain are some of the domains that would come under the program’s purview.

“2016 was a big year for deep tech. Globally, over US$5 billion venture capital investment went into it,” Sanat Rao, Venture Partner with IDG, points out to Tech in Asia. This year, he expects more startups to take a moonshot with fresh innovations.

“We believe 2017 will be the year of frontier tech in India and several world-class companies will be built. Some of these companies will have a global footprint, and others will innovate for the next 6 billion people. Through the Frontier Tech Innovators Program – #FTIP2017 – we want to reach out to this next wave of path-breaking product startups,” he said. IDG has already invested in deep tech startups such as Active.ai, Sigtuple, Hansel.io, Infisecure, Forus, Perfint, Axio, and Iviz.

Axilor’s strategy too has been along the same lines. The accelerator, which was launched in November 2014, has its eye on five sectors: artificial intelligence, fintech, healthtech, enterprise and SaaS (software-as-a-service), apart from consumer internet.

“Some of the new opportunities around security, blockchain, robo-advisory [automated portfolio management] products can be interesting. Or, for that matter, businesses which leverage Aadhaar [unique number as citizen ID] and IndiaStack [digital infrastructure] to create solutions addressing India-specific solutions can be disruptive,” Axilor CEO and co-founder Ganapathy Venugopal told Tech in Asia in an earlier interview. Since its launch in November 2014, Axilor has worked with over 40 startups through its accelerator program and made 20 investments.

The FTIP2017 is now open for applications. Around 25 startups will be shortlisted for investment and other support, Sanat says.

See: Thrillers to tragedies: India’s failed ecommerce pioneer on what ails Flipkart, Snapdeal

The shift to deep tech comes at a time when consumer internet startups in India are clocking huge losses, laying off large numbers of employees, or simply shutting down as they reach the end of their runways. Their discount-led business models are under scrutiny and investors are asking hard questions on unit economics. The new interest in deep tech product startups comes with this backdrop.

This post Ecommerce loses allure, investors kickoff hunt to find and fund deep tech startups appeared first on Tech in Asia.

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