Former Defence Secretary Ajay Kumar enters VC industry with Mounttech Growth Fund: Report

Speaking to ET, Kumar said the central government initiatives, including the Ministry of Defence’s flagship startup programme Innovations for Defence Excellence (iDEX), have increased the scope for startups in the defence and aerospace sectors.

Under the iDEX programme, the defence ministry provides grants to startups working in these sectors and offers contracts to develop products and technologies for use by the Indian defence forces.

According to government data, iDEX currently works with around 400 startups and small businesses. The government has so far approved the purchase of 35 lots worth up to RS 2,000 crore.

According to Tracxn data, in 2023, aerospace, defence and maritime companies received $230 million in funding across 67 rounds, while in 2024, $74.1 million has been raised across 28 funding rounds so far.

“Almost two-thirds of defence procurement comes from domestic companies… and this creates a huge opportunity for Indian startups to grow and scale,” Kumar told ET in an interview, adding that the new fund will soon complete its maiden investment in the space sector.

Kumar said the fund will tie up with other dedicated venture capital firms and incubators at academic institutions such as the Indian Institute of Science, Bengaluru and the Indian Institute of Technology, Kanpur, to source potential partners.