Representative illustration.
Credit: iStock Photo
The old playbook of venture capital — high-risk bets in Silicon Valley chasing blitz-scale growth — is no longer the benchmark. The real opportunity for generational wealth creation has moved east, and India is now the most compelling geography for long-term, innovation-led returns. This is not a trend — it’s a structural shift. And Karnataka is at the heart of it.
Venture capital in India is no longer a fringe asset class. It is becoming a core pillar of national economic strategy — redirecting domestic capital from legacy assets like gold and real estate into productive, high-growth equity. This transition is not about chasing unicorns. It’s about building durable, IP-led businesses that can compound value over decades and distribute wealth across a broader base of founders, professionals, and domestic investors.
India’s venture ecosystem has hit maturity
Two foundational shifts have enabled this transition:
Access to global-grade infrastructure: Cloud platforms, open-source tools, and remote work have flattened the playing field. Startups can now be built from anywhere.
India stack as a public digital backbone: Aadhaar, UPI, DigiLocker, and ONDC have created a unique, low-cost infrastructure for startups to scale across a billion-person market. No other country offers this.
The capital itself has matured. The era of ‘growth-at-any-cost’ is giving way to disciplined investing with a clear path to profitability. Investors are now underwriting real business models, not just narratives. This is a healthy correction — and it’s laying the groundwork for long-term wealth creation.
Crucially, we’re seeing liquidity. IPOs and strategic exits are no longer rare events. They are becoming a repeatable outcome. This is what converts paper wealth into real capital — capital that recycles into the ecosystem via new angel investors, seed funds, and family offices.
Karnataka’s strategic positioning
Karnataka remains the anchor of India’s innovation economy. Bengaluru still attracts the lion’s share of VC capital and talent. But the next phase of wealth creation will come from the state’s deliberate pivot toward DeepTech and regional expansion.
The most defensible, long-term value will be created in IP-heavy sectors: AI, semiconductors, quantum computing, aerospace, and advanced manufacturing. These are not quick-flip businesses. They require patient capital, technical depth, and policy alignment.
Karnataka has moved early to catalyse this shift:
₹300 Cr Fund of Funds to de-risk early-stage DeepTech and crowd in private capital.
₹600 Cr DeepTech Fund focused on ventures rooted in core science and engineering.
This is not about incremental innovation. It’s about building globally competitive companies from India that solve hard problems and create long-term economic moats.
Domestic capital is stepping up
The final piece of the puzzle is capital ownership. For this ecosystem to be sustainable, Indian innovation must be backed by Indian capital.
We’re seeing a structural shift:
Family offices are moving beyond real estate and public markets into venture. They’re bringing patient, long-term capital, and professionalising their investment approach.
Founder VCs — entrepreneurs who’ve exited and are now backing the next generation — are emerging as credible, aligned limited partners.
This is critical. When the capital base is domestic, the value created stays in the country. It gets reinvested. It compounds. It builds institutions.
The takeaway
India’s venture ecosystem is no longer a derivative of Silicon Valley. It is a sovereign, self-sustaining engine of wealth creation. Karnataka is leading this transformation — not just through capital, but through policy, infrastructure, and talent density.
This is not about chasing the next unicorn. It’s about building a resilient, IP-led economy that creates wealth across generations and geographies. The opportunity is here. The capital is local. The time is now.
Kalyan Sivalenka is Managing Partner, Hyderabad Angels Fund.
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.