Anagha Rajesh, a BITS Pilani graduate, spent two years building a prototype capable of reducing the cost of DNA-based data storage from ₹3.5 lakh to ₹100 per megabyte. She raised ₹5 crore in funding, including from investor Nikhil Kamath. Then she decided to move her startup, BioCompute, to the United States. Her reason: "India has money but less patience."
Her decision is not isolated. It is, according to multiple founders, industry analysts, and government data, symptomatic of a structural gap that India's startup ecosystem has not yet closed — particularly in deep technology, foundational research, and long-horizon innovation.
The Exits: Founders Speak
Raahul Hari Nair, 24, left India to build CHIGRIDS, an energy-sector startup, from the United States. He described the capital environment in India as one defined by short-term expectation rather than long-term belief. "There are very few investors who can remain patient for the long term, with the mindset of getting quick results influencing investment decisions," he said. "This results in the migration of startups and weakens their chances of survival in India."
Subarna, 35, developed her e-commerce strategy platform idea while still in India, then left in 2021. "The idea originated when I was in India, but it eventually launched after I moved out," she said. She pointed to a fundamental difference in how investment decisions get made in the two markets. "In the US, even if the money belongs to an older generation, decisions on where and how to invest can still be taken by younger people who understand the space. That chain works differently there. In India, it doesn't."
The pattern extends well beyond these two cases. Startups including Emergent, Atomicwork, Composio, Smallest.ai, Beatoven.ai, and GetCrux received their seed funding in India but are now scaling from Silicon Valley.
What the Numbers Say
The exits are happening against a backdrop of rising closures and tightening capital. According to industry data, 11,223 startups shut down in India in 2025 alone — a 30% increase from 8,649 closures in 2024. India's startup funding rounds fell by nearly 39% from a year earlier to 1,518 deals, with seed-stage funding declining 30% to $1.1 billion in 2025, as investors pulled back from experimental bets.
The funding gap in deep tech is especially stark. Indian deep tech startups raised $1.65 billion in 2025 — a recovery, but still a fraction of the approximately $147 billion deployed into U.S. deep tech that year, and the roughly $81 billion invested in China, according to data from Tracxn.
India's tech startup ecosystem raised $9.1 billion in 2025 — up 23% — including $2.3 billion in deep tech funding, but the Nasscom Tech Startup Report 2025 identified the transition from Seed to pre-Series A as the ecosystem's most fragile stage, where many startups lose momentum without failing outright.
The Policy Response — and Its Limits
The Indian government has moved to address this. New Delhi recently updated its startup framework, doubling the period during which deep tech companies are classified as startups to 20 years and raising the revenue threshold for startup-specific tax, grant, and regulatory benefits to ₹3 billion, up from ₹1 billion previously. The government also announced a $1.15 billion Fund of Funds in January 2025 and committed ₹1 trillion ($12 billion) to a Research, Development, and Innovation scheme targeting quantum computing, robotics, space technology, biotech, and AI.
These are significant commitments on paper. But founders and analysts say the gap between policy announcement and functional ecosystem remains wide.
"For technology and services startups in India, the problem is not funding but the expectation of quick returns. That works for consumer tech, but not for deep-tech ideas that need long-term research and patient capital," Subarna said.
Congress MP Shashi Tharoor has publicly flagged the same fault line, pointing to short-termism and an inadequate appetite for high-risk, high-reward bets in India's innovation ecosystem.
A More Hopeful Signal — But Cautious
Not every young founder is pointing toward the exit. Mehak Parvez, 22, a Chennai-born founder currently studying in the United States, is working on a cold storage solution for Indian farmers and sees opportunity at home. "India has its problems, and the US has its own," she said. "The support system is present in both countries. Many things are happening in India too."
For the first time, 48% of new startups registered in 2025-26 came from beyond India's top six metros, with cities like Jaipur, Kochi, Indore, Bhubaneswar, and Lucknow emerging as credible startup hubs driven by lower costs and state government incentives.
What Comes Next
India's challenge, as founders frame it, is not a lack of talent or ideas — it is a structural reluctance to back both for long enough. The country claims 16% of the world's AI talent and ranks first in global AI skill penetration, according to government data. But talent and mission do not automatically become companies.
A private investor coalition — including Accel, Blume Ventures, Celesta Capital, Qualcomm Ventures, and Kalaari Capital — has committed more than $1 billion to back Indian deep tech startups, with Nvidia acting as an adviser. Whether that private commitment, combined with government reform, translates into founders choosing to stay and scale from India is the question this decade must answer.
Reporting for this story included direct interviews with founders Anagha Rajesh, Raahul Hari Nair, Subarna, and Mehak Parvez. This story is developing; additional data and founder accounts will be incorporated as available.
