Faster capital deployment, government partnerships could move needle for biotech: Startups

India's newly launched Rs 2,000 crore biotechnology fund needs to move fast and do more than write cheques, said startup founders.

The Biotechnology Industry Research Assistance Council (BIRAC) launched the fund on February 13 to bridge the funding gap between laboratory discovery and commercial production for biotech startups. It is part of the broader Rs 1 lakh crore Research and Development and Innovation Fund.

Startup founders said in an industry where product development is a lengthy process and user adoption is crucial, financing alone will not be enough.


"The deployment must be accelerated. If you have funds today, you can do something meaningful in two years," said Hitesh Goswami, founder of 4BaseCare, a precision oncology company that plans to apply for support under the scheme. "It has to be given to companies providing local solutions, and the government should adopt those solutions in its own institutions such as hospitals."

Beyond the cheque

Without demand-side push, even well-funded domestic startups struggle to establish a foothold, Goswami said. 4BaseCare majorly partners with private firms.

The biotechnology fund targets startups that have reached proof-of-concept or further development stages, particularly those pursuing pre-clinical trials in new molecules, said BIRAC managing director Jitendra Kumar. Deployment cycles will run 12 months, and the initiative will roll out in the coming months, he said.

Regulatory complexity remains a persistent challenge, particularly for small firms, Goswami said. "Companies often lose time not because they are doing anything wrong, but because navigating approvals is opaque and slow."

Drug discovery can take 15 years from lab to patient, said Ganapathy Subramaniam, founding managing partner of venture capital firm Yali Capital. “Regulatory testing alone consumes more than two years, longer than almost any other deep-technology sector," he said. "So, this is a very important step from the government."

The fund arrives as the sector has grown from around 50 biotech startups in 2014 to more than 11,000 today, a jump in scale and ambition that union minister Jitendra Singh, speaking at the fund launch on February 13, described as a "quantum jump".

Access to incentive schemes is still a problem, especially for small firms, said Sachin Santhosh, founder of Accel-backed Scimplify, a Bengaluru-based speciality chemical manufacturer. "It is not easy for small companies or small manufacturers to access PLIs (production-linked incentives), it is largely benefiting big manufacturers." Extending those benefits to smaller firms matters as much as any new fund, he said.

Talent is the other constraint. "India is losing researchers to the United States and the United Kingdom. We need programmes to bring them back," Santhosh said. Clusters such as Genome Valley in Hyderabad and the nascent Bengaluru Lifesciences Research District are a start, he added.

The bigger opportunity lies in contract manufacturing. Global drug companies are actively diversifying production away from China, and India has the manufacturing capacity and regulatory experience to compete, said Subramaniam. But winning those mandates requires years of trust-building, large facility investments and strict regulatory compliance, a path companies such as Laurus Labs and Divi's Laboratories have spent years navigating.