India's startup ecosystem is rapidly evolving. According to the Ministry of Commerce and Industry, India boasts the world's third-largest startup ecosystem, with an anticipated annual growth rate of 12-15%. In 2018, the country had approximately 50,000 startups, with 8,900 to 9,300 being technology-driven. Remarkably, 1,300 new tech startups emerged in 2019 alone, averaging 2-3 new tech startups each day.
However, the defence sector demands a greater number of startups to reduce India's dependency on imports for national security. In response, former Defence Secretary Ajay Kumar, who retired in 2022, has entered the venture capital industry. He established Mounttech Growth Fund, where he serves as chairman, to support early-stage startups in the defence, deep tech, and aerospace sectors. The fund is led by CEO Ravi Sethia, a former senior executive in the telecom industry. The advisory group includes retired armed forces officers like RKS Bhadauria, ex-Air Force Chief of India, and SN Ghormade, ex-Navy Vice Chief of India, along with renowned business professionals and industrialists.
Kavach, the flagship scheme of Mounttech Growth Fund, is backed primarily by Suryakant Dalmia, a board member of Dalmia Securities, and other affluent individuals. The fund has successfully raised โน250 crore, with additional subscriptions worth โน280 crore. It has also received approval from SEBI (Securities & Exchange Board of India) for a greenshoe option to raise an additional โน250 crore.
Kavach aims to boost the defence and aerospace startup ecosystem. Recently, the fund signed a Memorandum of Understanding (MoU) with T-Hub at DAIS 2024. This strategic move aims to bolster defence, national security, digital communications, and aerospace sectors.
With this move, India aims to capture a larger share of the rapidly growing global defence market through increased exports. According to Business Research Insights, global defence market was valued at $2155138.01m in 2021 which is projected to reach $3686901.92m by 2032 growing at a compound annual growth rate (CAGR) of 5.0% during the meantime period.
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