DLI Scheme-Backed Chip Design Start-ups Continue to Attract Leading Investors

DLI Scheme–Backed Chip Design Start-ups Continue to Attract Leading Investors

C2i Semiconductors Raises $15 Million Series A Led by Peak XV Partners — Largest Funding Round by an Indian Semiconductor Start-up

India’s semiconductor chip design ecosystem is gaining strong momentum, with startups supported under the Government’s Design Linked Incentive (DLI) Scheme drawing sustained interest from marquee investors and enterprise customers alike. In a sector traditionally viewed as capital-intensive, high-risk and slow to generate revenues, structured policy support is now reshaping investor confidence.

In a landmark development, Bengaluru-based C2i Semiconductors has raised $15 million in Series A funding, led by Peak XV Partners (formerly Sequoia Capital India & SEA). This marks the largest funding round secured by an Indian semiconductor startup to date, underscoring the growing maturity of India’s deep-tech ecosystem.

The DLI Scheme: De-Risking Deep-Tech Innovation

Before 2021, venture capital investment in India’s semiconductor design space remained limited. Chip design ventures typically require:

• Long development cycles
• Heavy R&D investment
• Significant upfront infrastructure
• Extended time before revenue realization

Recognising these challenges, the Government of India launched the DLI Scheme in 2022 to reduce entry barriers and enhance ecosystem confidence. The scheme provides:

• Financial incentives
• Access to advanced Electronic Design Automation (EDA) tools
• Access to IP cores
• Centralised infrastructure support
• Ecosystem visibility and industry connect

Startups are selected through a rigorous technical evaluation process by an expert committee comprising industry veterans and specialists. This structured support framework has significantly improved commercial viability and investor trust in Indian chip design startups.

C2i Semiconductors: Engineering the Future of AI Power Delivery

Founded on 5 June 2024 in Bengaluru by a team with decades of experience at global semiconductor leaders such as Texas Instruments, National Semiconductor and Maxim Integrated, C2i Semiconductors was approved for DLI support effective 1 November 2024.

With semiconductor veteran Ganapathy Subramanyam, Founding Managing Partner at Yali Capital, on its Board, the company is focused on building intelligent power-management semiconductor solutions for next-generation AI data centres and cloud infrastructure.

The company has rapidly scaled its engineering team to 65 engineers and is now among the top three users out of 100 companies accessing the centralized EDA tool grid at the ChipIN Centre under the DLI Scheme — a strong indicator of active product development.

The Challenge: Power as the New Bottleneck in AI Infrastructure

As artificial intelligence workloads expand, modern data centres demand extremely stable and high-density power supply systems. However, legacy power architectures were not designed for continuous AI-driven computational intensity.

This results in:

• Energy inefficiencies
• Excessive heat generation
• Reliability challenges
• Reduced GPU lifespan
• Scaling constraints

In short, power delivery has become the limiting factor in high-performance computing systems.

The Innovation: Rethinking Power from Grid to Core

C2i is reimagining how electricity flows inside a server — from the incoming grid supply to the processor chip — through a “grid-to-core” intelligent architecture.

Rather than incrementally improving individual components, C2i is building a smart, configurable system-level power platform that:

• Optimizes power delivery in real time
• Maintains voltage stability under heavy AI loads
• Improves energy efficiency
• Reduces heat and component failures
• Extends equipment lifespan
• Simplifies server architecture
• Enables faster deployment
• Supports large-scale data centre expansion

In simple terms:

C2i is developing an “intelligent power brain” for AI infrastructure — ensuring high-performance computing systems operate reliably, efficiently and continuously.

The company expects its first silicon designs to return from fabrication by mid-2026, after which validation and performance benchmarking will begin.

Investor Confidence: A Strong Signal for Indian Deep-Tech

Peak XV Partners’ $15 million Series A investment follows a $4 million round led by Yali Capital in 2024. Cumulatively, the startup has raised approximately Rs.170 crore to date, in addition to DLI Scheme support.

Rajan Anandan, Managing Director at Peak XV Partners, highlighted that C2i’s approach could significantly extend GPU lifespan and unlock billions of dollars in industry savings by improving energy efficiency and system reliability.

The scale and speed of investor backing demonstrate growing conviction in India’s ability to build globally competitive semiconductor product companies — not just service providers.

Policy Alignment: Building a Design-Led Semiconductor Nation

The development aligns closely with the semiconductor vision articulated by Union Minister Ashwini Vaishnaw. The Government’s semiconductor programme emphasizes strengthening both design and manufacturing, with a clear focus on:

• Domestic intellectual property creation
• Globally competitive product companies
• Access to advanced design tools and IPs
• Long-term ecosystem capacity building

India already possesses a deep talent pool in chip design. With structured support through initiatives like the DLI Scheme, startups are now translating that talent into globally scalable technology ventures.

A Turning Point for India’s Semiconductor Story

C2i’s funding milestone is more than a startup success — it represents a broader shift in India’s semiconductor narrative.

Where venture capital once hesitated, it is now actively competing to back Indian chip design innovation.

Where hardware startups once struggled for early support, they now benefit from policy-backed de-risking and world-class design infrastructure.

As DLI-supported startups continue to attract capital and move toward silicon validation, India’s ambition to become a trusted global semiconductor partner is steadily transforming from policy vision to technological reality.