When a mid-sized pharma team in Boston quietly handed an AI model a decade’s worth of drug-screening data and watched it return a promising antibody candidate in weeks, investors took note. After years of hype cycles, venture capital is moving from buzzword bets to capital that buys lab time, compute, and long horizons — and startups that promise real-world hardware or biology outcomes are getting rewarded.
Why this matters
VC pools are shifting from quick SaaS multiples toward capital-intensive deeptech and bio-AI that require patient capital but can create durable moats and real societal impact — cures, sensors, robotics — rather than viral apps.
Funding signals: real money, longer timelines
2025 deal activity shows a jump in late and growth rounds for AI-driven biotech and hardware-led deeptech. Big pharma and strategic corporate investors (Sanofi, Takeda) are writing large cheques to AI-first drug designers and platform companies — an example being expanded partnerships where pharma pays upfront and milestone payments tied to AI discoveries. Reuters
What investors now buy: capability, not narratives
Investors seek teams with lab access, physical infrastructure, or proprietary datasets — not just models. Recent reports show AI startups capturing a majority of VC dollars in 2025; but within that pool, deeptech and bio-AI rounds are notable for their size and strategic lead investors. The Economic Times
Human stories: founders, late nights, and a patient LP
A founder in India described turning down multiple fast VC term sheets in 2024 to stay focused on proof-of-concept hardware — that patience paid off with a 2025 strategic grant from the government and a large anchor investor who wanted an industrial partner. Local entrepreneurship competitions are also fueling smaller deeptech wins around the world. The Times of India
Risks and operational realities
Deeptech requires capital for manufacturing, regulatory timelines for biotech, and time to clinic. LPs must accept longer hold periods; VCs must build or partner for wet lab and regulatory expertise.
Conclusion
The post-hype era doesn’t kill AI or audacious ideas — it re-allocates capital to teams who can deliver measurable physical outcomes. For founders: show capability. For investors: align incentives for multi-year milestones. For readers, the change means innovation that touches bodies, factories, and cities — not just screens.
References
• Reuters — Nabla Bio / Takeda AI partnership. Reuters
• Reuters — Formation Bio funding round and Sanofi relationship. Reuters
• CB Insights / market roundup reporting on AI capturing VC dollars. The Economic Times
• AlleyWatch Weekly Funding Report (11/10/25) — notable rounds. alleywatch.com
• Times of India / National Bio Entrepreneurship Competition (India) — local deeptech wins. The Times of India
