On July 7, 2025, the Indian Institute of Technology Madras (IITM) launched the ‘IITM Alumni Fund,’ a Rs 200-crore venture capital fund to support startups emerging from its ecosystem. Unveiled at the Sangam 2025 event in Bengaluru, the fund targets deeptech, artificial intelligence (AI), and healthtech sectors, aiming to cement IITM’s position as a leading hub for India’s startup growth. This report explores the fund’s objectives, structure, and potential impact on the startup landscape.
Background
IIT Madras has long been a breeding ground for innovation, with its alumni founding over 250 startups, including unicorns like Freshworks and Ather Energy. The institute’s robust incubation ecosystem, anchored by the IITM Incubation Cell, has supported ventures generating Rs 45,000 crore in market value. The launch of the IITM Alumni Fund builds on this legacy, leveraging alumni networks and expertise to address funding gaps in early-stage ventures.
Fund Overview
- Name: IITM Alumni Fund
- Size: Rs 200 crore (~$24 million)
- Focus Areas: Deeptech, AI, healthtech
- Target Stage: Seed to Series A
- Management: Led by IITM alumni and industry veterans
- Launch Event: Sangam 2025, Bengaluru, July 7, 2025
The fund aims to provide capital, mentorship, and market access to IITM-affiliated startups, prioritizing technologies with high-impact potential. It is structured to offer flexible investments, ranging from Rs 1–10 crore per startup, with follow-on funding for high-performing ventures.
Objectives
- Fuel Innovation: Support cutting-edge research in AI, biotech, and advanced manufacturing.
- Bridge Funding Gaps: Address the lack of early-stage capital for deeptech startups.
- Strengthen Ecosystem: Enhance IITM’s incubation network, fostering collaboration between alumni, faculty, and entrepreneurs.
- Global Competitiveness: Position Indian startups to compete in global markets.
Strategic Context
India’s startup ecosystem raised $5.7 billion in H1 2025, up 8% from 2024, per Inc42. Deeptech and healthtech are gaining traction, with AI startups alone securing $1.2 billion. However, early-stage funding remains a bottleneck, with only 15% of seed-stage ventures securing capital. The IITM Alumni Fund addresses this gap, aligning with India’s push for self-reliance in technology under initiatives like Atmanirbhar Bharat.
The fund’s launch coincides with global economic shifts, including U.S. tariffs impacting supply chains. By focusing on deeptech, IITM aims to create resilient, innovation-driven startups less vulnerable to trade disruptions.
Impact Potential
- Economic Growth: The fund could create 5,000–10,000 direct and indirect jobs over five years, based on IITM’s historical startup impact.
- Innovation Pipeline: Support for 50–75 startups, accelerating breakthroughs in AI diagnostics, sustainable energy, and robotics.
- Alumni Engagement: Strengthens IITM’s global alumni network, with contributions from 500+ donors across 20 countries.
- Regional Hub: Positions Chennai as a deeptech innovation center, complementing Bengaluru’s SaaS dominance.
Challenges and Mitigation
- Challenge: High-risk nature of deeptech investments.
- Mitigation: Diversified portfolio and rigorous due diligence by experienced fund managers.
- Challenge: Competition from larger VC funds.
- Mitigation: Leverage IITM’s brand and alumni network for unique deal flow.
- Challenge: Scaling startups globally.
- Mitigation: Partnerships with international accelerators and market access programs.
The IITM Alumni Fund marks a pivotal step in scaling India’s startup ecosystem, particularly in high-impact sectors like deeptech and healthtech. By harnessing IITM’s academic and alumni strengths, the fund is poised to drive innovation, create jobs, and enhance India’s global tech standing. As the fund deploys capital, its success will depend on strategic investments and robust mentorship.
