VCs Pivot to Defense Tech, Zepto’s IPO, and Wow! Momo’s Fundraise

For a decade, Indian venture capital chased speed. Apps scaled fast, platforms burned faster, and growth looked impressive until capital tightened. That era is now ending, decisively. One of the clearest signals came in late 2025, when a ₹268 crore ($30 million) funding round into defence electronics company CoreEL became one of the year’s standout growth-stage deals. It was a message, that Indian venture capital is moving from screens to steel.

This shift isn’t driven by nationalism. It’s driven by exhaustion with fragile consumer tech economics and a renewed respect for businesses where contracts last decades, not quarters. A food delivery app fights churn every week. A defence supplier, once embedded, can stay relevant for 10-20 years. That difference is reshaping how investors think about risk.

What’s emerging is a new form of capital - patient, state-aligned, and comfortable with slower velocity. Startups that once avoided government customers are now building internal teams just to navigate defence procurement. B2G is no longer seen as bureaucratic pain. It’s becoming the most reliable customer category in the country.

The numbers explain the confidence. India’s defence exports crossed ₹23,600 crore in FY25 and are targeted to hit ₹50,000 crore by FY29. This isn’t fantasy. Indian drones, electronic warfare systems, and avionics often cost a quarter of comparable Western alternatives. As global defence budgets tighten and conflicts multiply, cost-performance is beating brand pedigree.

For VCs, this changes the risk profile. Defence tech has brutal gestation cycles - three to five years before serious orders - but once contracts land, churn drops to zero. There’s no CAC, no influencer marketing, no weekly discounting. You win a tender, and the customer stays.

The danger zone lies between trials and purchase orders. Many startups bleed out waiting for approvals and payments. The survivors are learning to build dual-use businesses - drones that serve agriculture or logistics while waiting for military orders, AI systems that work in hospitals before moving to battlefield surveillance. Optionality is no longer strategy; it’s survival.

Globally, this playbook is familiar. Post-9/11 America produced Palantir and later Anduril, turning defence into mainstream venture outcomes. India is following a similar arc, but with a twist: exports. Indian defence startups are increasingly supplying the Global South - countries that want capable, affordable systems without geopolitical baggage.

Friction remains. Procurement still leans heavily on the L1 (lowest price) rule, often favouring incumbents over innovation. Access to testing labs, firing ranges, and certifications remains tightly controlled. In defence, infrastructure access decides who lives long enough to scale.

The government’s role has also shifted. With a ₹1 lakh crore deep-tech R&D push, the state is no longer just a regulator. It’s the anchor customer. That single change solves the customer-acquisition problem that killed many consumer startups in 2025. What remains missing is speed - faster pilots, quicker tenders, and procurement cycles that don’t suffocate innovation.

This isn’t the death of Indian consumer tech. But it is the end of its dominance. Capital is choosing resilience over virality, contracts over clicks, and IP over installs.

The garrison economy isn’t coming. It’s already here.

Let’s go through what else is happening in Indian startup world. Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Aazma Luck Aazma”: Zepto Files Confidential Draft Papers For Over $1.3 Bn IPO

Zepto has confidentially filed draft papers with SEBI for an IPO of over $1.3 Bn, or about ₹11,682 Cr, marking a clear pivot toward the public markets.

The Aadit Palicha-led firm plans a fresh issue of roughly ₹11,000 Cr alongside an offer for sale by early investors. The issue is being lined up by bankers including Morgan Stanley, Goldman Sachs and HSBC.

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“Ye Bhed Bhaav Kyun”: IndiaMART Moves Calcutta HC Against OpenAI Over Alleged ChatGPT Exclusion

IndiaMART has moved the Calcutta High Court against OpenAI, alleging that its platform has been excluded from responses generated by ChatGPT.

The company claims this omission has dented its visibility, reputation, and commercial prospects as users increasingly rely on AI to discover suppliers. IndiaMART has alleged unfair discrimination, trade libel, trademark dilution, and unlawful interference with its business.

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1. Wow! Momo has raised ₹75 Cr from Madhusudan Kela as part of its ongoing bridge round, adding fresh firepower to its growth plans. The capital will fund expansion, product innovation, and a sharper push toward profitability.

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2. CarDekho has invested $10 Mn, or about ₹89.9 Cr, in its edtech arm CollegeDekho to deepen its push into non-metro markets. Founded in 2015, CollegeDekho helps students navigate courses, admissions, exams, and scholarships, turning higher education discovery into a data-led marketplace.

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3. Mintoak is raising ₹53.3 Cr in fresh capital from existing backers PayPal and Pravega Ventures, valuing the company at around ₹2,500 Cr. The Series A2 issuance, cleared by the board and filed with the Registrar of Companies, follows an $8 Mn secondary transaction earlier this year.

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