Private equity firm Gaja Alternative Asset Management Limited is increasing the time it spends evaluating deeptech and AI opportunities, according to a top executive at the company, as domestic PE firms begin to look more closely at a sector that has traditionally attracted venture capital.
“The number of companies across our coverage areas are growing 25%, within deeptech and AI our coverage is growing 50%,” said Gopal Jain, co-founder, chief executive and managing director of Gaja Alternative Asset Management Limited (Gaja Capital), in an interview with Mint.
Gaja Capital is the latest in a relatively short list of PE firms that have committed to investing in deeptech. The sector has mostly seen money flow in from venture capital investors. For companies reaching scale, access to capital within the country has been limited, forcing founders to tap sovereign funds or foreign investors.
The firm's decision to spend more time on deeptech is a sign that domestic PE firms are beginning to see some maturity in the sector.
This year so far, deeptech startups have raised $2 billion across 179 deals, according to startup intelligence platform Tracxn. While deal volume has dropped compared to the 433 deals in 2025, deal value this year is already higher than the entirety of last year, which stood at $1.6 billion.
With deeptech companies showing that they can generate revenue and scale, domestic PEs are finding that they are viable investments which can produce large outcomes down the line. This is in addition to India's broader sovereignty push, where localization of core technologies is increasingly a priority.
PE warms up
Earlier this year, under the Fundamentum Partnership umbrella, Fundamentum Frontier Advisors was announced, which will be handling a ₹3,000 crore fund targeting growth-stage AI, consumer tech and frontier-technology startups in India.
Traditionally, Gaja has backed businesses across consumer brands, financial services, tech-enabled services and enterprise tech. However, recently the firm participated in the $75 million second tranche of foundation artificial intelligence model startup Sarvam's Series B round.
In June, Sarvam raised $234 million in the first tranche of its Series B round led by IT services company HCL Technologies Limited, which picked up a 10.46% stake in the company. Bessemer Venture Partners joined the company's cap table alongside the IT major. Existing investors Khosla Ventures and Peak XV Partners also participated in the round.
The round valued Sarvam at $1.5 billion, an increase of nearly 13.5x. Back in 2023, when the company raised $41 million across its seed and Series A round, it was valued at $111 million, according to Tracxn.
Sovereign play
Gaja Capital's investment in Sarvam, in particular, is based on the firm's belief that backing sovereign plays is important and that as India grows, self-reliance will be key—not just in AI, but in other areas as well.
"India is no longer a small economy, it is a large one that is seeing self-reliance becoming more and more important,” said Jain.
Gaja Capital's decision to back deeptech lies in how Jain says India has evolved and is moving from being an entrepreneurial economy to an innovation-led one.
“This requires capital to sustain the innovation, which will come from the government, corporates, financial investors. There isn't enough at the moment.”
Apart from AI, the firm is also spending time broadly evaluating the entire deeptech ecosystem, with some key areas of interest including intelligent manufacturing, defence as well as quantum technologies.
The addition of deeptech is in line with how the firm has operated historically. But that isn't to say areas where the firm used to spend time will see less capital.
“Every few years we will add a sector. But as the team grows, our resources grow, our depth grows, we don't leave a traditional sector. They become frontline sectors as they get ‘tech-ised,’” said Jain.
IPO pipeline
Gaja Capital filed its updated draft red herring prospectus with market regulator Sebi in December last year to raise ₹656-crore through its initial public offering. According to the updated document, the IPO will comprise a ₹549 crore fresh issue and a ₹107 crore offer for sale by promoters and early shareholders.
The IPO is being managed by JM Financial Ltd and IIFL Capital Services Ltd.
The firm is simultaneously scaling its fund platforms, with plans for a ₹2,500-crore fifth fund. This will be higher than its other flagship funds, with Fund II at ₹902.4 crore, Fund III at ₹1,598 crore and Fund IV at ₹1,775 crore.
It is also raising a ₹1,250-crore secondaries vehicle, the filing showed.