"Fundraising is tortuous": Nat Malupillai on how IIT Madras’ new fund gives founders room to breathe

The IIT Madras Research Park has joined forces with Unicorn India Ventures to launch the IITM Unicorn Frontier Fund I, a Rs 1,000-crore venture capital fund aimed at providing early-stage deep-tech founders with the breathing room they need to innovate. Backed by prominent alumni, financial institutions, and family offices, the fund has already reached its first close of Rs 450 crore, committing nearly Rs 55 crore to its initial slate of startups, including Hathor, Quanstra, Triolt Energy, and Carbelim.

These companies specialize in creating semi-cryogenic and cryogenic rocket engines, single-photon detection technology, battery and energy storage solutions, and carbon capture systems. The fund targets IP-heavy, early-stage startups involved in semiconductors, space technology, electric vehicles, battery materials, quantum technology, robotics, artificial intelligence, biotechnology, and healthcare—fields that are key to building India's technological independence.

In an interview with YourStory, Nat Malupillai, Group CEO of IIT Madras Research Park, discusses how fundraising distraction is hindering promising deep-tech ventures, how patient capital can make a difference, and why India's education system needs a radical overhaul. Instead of getting lost in pitch decks, founders are often pulled away from perfecting their technical products.

The IIT Madras ecosystem already boasts a strong pipeline of student innovations, but there's a significant financial gap that the new fund aims to bridge. Initially planned as a Rs 600-crore fund, overwhelming investor interest pushed the target to its current Rs 1,000-crore level, which allows for meaningful capital deployment without reckless spending.

Malupillai opted to partner with Unicorn India Ventures instead of managing the fund internally, recognizing the distinct expertise needed to handle VC portfolios. The fund focuses on high-impact early-stage ventures across India, including semiconductors, rocket propulsion, EV battery chemistry, advanced materials, biotechnology, AI infrastructure, and robotics.

While it won't invest in mature scale-ups like Ather Energy, it aims to support brilliant ideas that have cleared the initial science hurdles and are struggling to secure the first catalytic funding round. Malupillai emphasizes that India's education system needs to change, moving away from rote learning and entrance exams that don't prepare students for real-world challenges.

Practical, hands-on learning is essential for fostering an innovation culture, and students should be encouraged to think critically and turn theory into practical solutions. Malupillai draws parallels to the Indian Premier League (IPL), suggesting that the startup ecosystem in India can benefit from a similar transformation, providing top-tier support and resources to talented founders across the country.