Former official Ajay Kumar, who left his position as India’s defense secretary in 2022, has entered the venture capital market by founding Mounttech Growth Fund, a new fund that invests in early-stage companies in the rapidly growing deeptech, aerospace, and defense industries.
According to persons with knowledge of the situation, Kumar’s Rs 250 crore fund, which has received permission from the Securities and Exchange Board of India (Sebi), has received subscriptions totaling Rs 280 crore and plans to exercise the greenshoe option for an additional Rs 250 crore.
The fund’s limited partners and sponsors include several other wealthy individuals and domestic family offices, with Suryakant Dalmia, a board member of Dalmia Securities, serving as the fund’s principal sponsor.
Ravi Sethia, a former senior telecom sector executive, is the fund’s CEO, while Kumar serves as chairman.
Eminent business executives and industrialists have joined the fund as consultants, along with top former military officers. SN Ghormade, a former Indian Navy vice chief, and RKS Bhadauria, a former chief of the Indian Air Force, are among them.
As a result of central government initiatives, such as the defense ministry’s flagship program for entrepreneurs, Innovations for Defence Excellence, Kumar told ET that there are now many more prospects to develop businesses in the aerospace and defense industries.
The defense ministry gives contracts to create products and technology for use by Indian defense forces, as well as incentives to startups operating in these fields, under the iDEX initiative.
Government data indicates that approximately 400 startups and small businesses are presently working with iDEX. The government has approved the purchase of 35 products totaling almost Rs 2,000 crore as far.
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The 350th contract under iDEX was announced by the Center last month to Lightspeed and Google-backed hypers.
“Almost two-thirds of defence procurement is from domestic companies… and this presents a huge opportunity for Indian startups to build and scale,” Kumar told ET, adding that the new fund would soon finalise its first investment in the space sector.
Kumar also said that the fund would forge tie-ups with other specialised venture capital firms and incubators at academic institutions such as Indian Institute of Science in Bengaluru.
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About Ajay Kumar
Ajay Kumar is an IIT Kanpur alumni who retired in 1985 as an Indian Administrative Services officer from the Kerala batch. Based on information obtained from Tracxn, businesses in the aerospace, defense, and maritime industries were funded $230 million during the course of 67 rounds in 2023. Through 28 funding rounds, $74.1 million has been raised in 2024 thus far.
