India’s startup ecosystem is undergoing a transformative phase, with deeptech sectors like AI, IoT, and geospatial intelligence emerging as key drivers of innovation. As global investors eye these high-potential industries, the interplay between risk and reward is sharper than ever. Against this backdrop, Auxano Capital’s Brijesh Damodaran shares insights into navigating this dynamic investment landscape.
Brijesh Damodaran, Co-founder and Chief Investment Officer, Auxano Capital, begins with a foundational truth about investing, it is about generating returns. “Investors are not an NGO, they aim to make money,” he states firmly, grounding his thoughts in practicality.
Yet, Damodaran is quick to point out that this pursuit of profit must align with a long-term vision, one that requires clarity, patience and a willingness to take risks. In a candid conversation, he dissects the evolving landscape of India’s startup ecosystem and deep-tech sectors, highlighting the opportunities and challenges for both promoters and investors.
Over the last decade, India’s startup ecosystem has matured, attracting a wider array of investors. However, he warns against a ‘get-rich-quick’ mentality, emphasising that meaningful returns often take five to nine years or longer. “Clear and transparent communication between promoters and investors is crucial,” he asserts. For investments to succeed, they must be underpinned by a shared vision and mutual understanding of the risks involved.
The Role of Government In Risk Capital
Risk capital, by its very nature, carries uncertainty, and Damodaran believes the government can play a pivotal role in mitigating this. Tax exemptions and concessions, he suggests, could act as incentives for investors willing to back ventures that may not immediately succeed.
“An incentive-driven, long-term approach is the way forward,” he notes, advocating for policies that balance risk and reward while encouraging sustained investment.
Progressive Policies
He lauds India’s recent geospatial and drone policies for democratising access and fostering innovation. These reforms, he explains, have streamlined processes and created new job opportunities, such as drone operators, while unlocking efficiencies in sectors like land mapping and warehousing.
“The policy not only democratises access but also contributes to employment generation,” he shares. By digitising land records, farmers now have clarity and autonomy over their assets, enabling smoother transactions and better revenue management.
Deeptech and Cross-sector Excitement
India’s deep-tech sector stands at the cusp of significant growth, with opportunities spanning geospatial technologies, enterprise solutions, and space exploration. Yet, he emphasises the importance of strategic focus. “Investors today are spoiled for choices, and the onus lies on promoters to share a compelling vision,” he says, underlining the need for clear communication.
Beyond deep-tech, he sees promise in emerging industries such as luxury, wellness, and healthcare, reflecting India’s broadening economic horizon.
India’s Macro Story: A Growth Engine
As India ascends the ranks of the global economy, its per capita GDP is poised to double from $3,000 to $5,000 in the coming years. He views this as a pivotal moment, unlocking unprecedented capital for growth across sectors.
“The surge in per capita GDP will create capital for growth across sectors,” he predicts, encouraging individuals to dedicate a portion of their income to investments in the burgeoning ecosystem.
Patience: The Key to Deeptech Success
Deep-tech investments demand a unique kind of commitment—one rooted in patience and long-term vision. Unlike the instant gratification of consumer gadgets, these ventures often take years to bear fruit.
“Deep-tech requires a horizon of 5, 7, or even 9 years to yield significant returns,” he advises. He believes this patient approach, coupled with strategic choices, can unlock transformative opportunities in India’s startup ecosystem.
A Shared Vision for the Future
His insights paint a vivid picture of an evolving India, where investors and promoters must work hand-in-hand to navigate the complexities of innovation and capital. With progressive policies, a booming economy, and untapped potential in deep-tech and other sectors, the stage is set for a transformative decade.
However, as he aptly concludes, “Clear vision, patient capital, and shared goals are the foundation of successful investments in this era of opportunity.”
