Vertex Ventures Southeast Asia and India is actively scouting for hardware and deeptech investments, with a sharp focus on semiconductors, robotics, and battery technology, according to a top executive at the firm.
“It's definitely a new space for us, but it makes sense due to how geopolitics is playing out. In the past two years, companies have been looking to be more independent and move away from relying on China,” Ben Mathias, managing partner at the firm, told Mint in an interview.
Vertex Ventures is the latest firm to build a deeptech investment thesis in India, joining a sector buoyed by the growing demand for "sovereign technology”. This shift mirrors a global trend: deeptech accounted for 36% of all venture funding last year, according to Celesta Capital. Also, global hardware investments have surged since 2023, nearly doubling from $150 billion to $280 billion.
Back home, investments in the sector have already hit $967 million in the five months of 2026, according to private company intelligence platform Tracxn, compared to $1.47 billion raised in the whole of 2025.
Vertex Ventures has traditionally focused on sectors such as fintech, consumer brands and tech and enterprise software, and has invested in companies such as FirstCry, XpressBees, Yatra and Kissht.
Last week the firm was part of BigEndian Semiconductors' $6 million pre-Series A funding round led by IAN Alpha Fund, with participation from IvyCap Ventures. The firm had previously written a $3-million seed cheque to the company. Last year it led deeptech startup Spyne's $16 million Series A round. Vertex Ventures and the International Finance Corporation had also backed electric vehicle charging and swapping infrastructure startup Kazam in a $6.2 million Series B round in 2024.
Vertex Ventures plans to continue holding its investment in BigEndian Semiconductors until the company goes public, and expects it to be ready for an initial public offering (IPO) in the next 5-7 years.
Mathias noted that their investment decisions hinge on a company's market strategy and whether they are targeting a global or local audience. “If they're going global, they need to make sure there aren't other players in that space because otherwise they're going up against Chinese or American companies.”
However, deeptech startups often have long gestation periods, which can make them unfit for sector-agnostic funds, given that they must fully exit all their investments within a 10-year cycle. It's why focused deeptech investors have longer fund cycles and are willing to be more patient, banking on outsized returns.
“Going into any investment, one thing we look at is if we can exit an investment in seven years,” Mathias said. “It's why we don't invest in biopharma because it's a specialised skillset and has long timelines.” While the firm prefers to hold on to companies until an acquisition or a public market exit, the firm is willing to consider exits through secondary transactions if companies exceed their projected timelines.
Completing deployment
Vertex Ventures usually deploys between $2-10 million across Series A and B rounds as the first cheque, picking up a 15-20% stake. The firm is currently investing from its fifth fund, with a size of $540 million and anchored by Temasek, contributing 30% of the overall fund.
“We have another year to go before we're fully deployed from this fund. By around the middle of the next year, we'll stop making new investments, reserving the rest for follow-on investments,” said Mathias. “Early next year is when we'll probably start fundraising for our sixth fund.”
The next fund is likely to be either the same size or slightly smaller than the current one— a deliberate choice rooted in the discipline required at the early stage of the venture cycle given that large funds can make it difficult for investors to return capital to their limited partners within the lifecycle of the fund.
Exits from previous funds
Vertex has already exited nearly a third of the 32 companies in its fourth fund which launched in 2020. There are a few exits lined up for this year as well, including audiobook and shortform content platform Kuku FM, which is prepping for a $200-million public market debut this year. The firm plans to continue holding another Indian portfolio company, beauty and personal care brand Pilgrim, with Mathias saying it will probably be IPO-ready in the next 24 months. Earlier this year, the firm partially exited lending tech company Kissht, in which it had invested from its third fund.
Within its Southeast Asia portfolio, two companies are currently preparing for IPOs in Singapore and Thailand. Additionally, Thailand-based digital lending platform Abacus has maintained profitability for 12 consecutive quarters and is expected to be ready for the public market within three years.
