Bengaluru, India – May 21, 2026 – Shastra VC, a venture capital firm specializing in deep technology, has officially launched a new $100 million fund designed to propel early-stage startups in critical sectors such as artificial intelligence (AI), spacetech, defense, and climate sciences. The announcement on Wednesday marks a significant development in India's rapidly expanding deeptech and AI investment landscape.
Fueling Innovation in High-Growth Sectors
The Bengaluru-based firm, previously known as Veda VC, plans to deploy capital ranging from $500,000 to $3 million per startup. The fund will prioritize companies building intellectual property-led businesses, with a particular emphasis on deeptech, AI, and renewable sciences. This strategic focus aligns with a global surge in investor interest towards foundational technologies, driven by evolving geopolitical dynamics and a growing emphasis on technological self-reliance.
Avijeet Alagathi, a partner at Shastra VC, expressed optimism about the current market conditions, stating, “India is at an inflection point for deeptech, AI and climate tech, with a new generation of globally relevant companies being built from here.” The firm highlighted that its third fund will sharpen its investment focus on space and defense technologies, AI, and renewable sciences, while also enhancing its capacity to support startups beyond the seed stage.
Strategic Investment Amidst Market Growth
Shastra VC has a track record of successful investments, having deployed approximately $55 million across its first two funds and currently managing around $100 million in assets. Its existing portfolio includes notable startups such as Simplismart, Alt Carbon, Sisir Radar, and Avammune. The firm's partners, including founder-operators Vasant Rao, Avijeet Alagathi, and Ashis Nayak, believe the new fund will enable them to capitalize on the increasing opportunities within India's deeptech ecosystem.
The launch of Shastra VC's fund comes at a time when the Indian startup ecosystem is experiencing dynamic shifts. While overall funding in early 2026 has shown a slight decrease compared to the previous year, there's a pronounced interest in specialized sectors. Reports indicate that AI and machine learning, in particular, have seen substantial investment, with venture capital behavior indicating a trend towards larger checks for fewer, high-quality startups with strong fundamentals and clear monetization pathways. The government's push for technological self-reliance through initiatives like the ₹1 lakh crore Research, Development and Innovation (RDI) scheme is also creating a more conducive environment for deeptech ventures.