Why are investors pouring billions into AI startups in India?

These funds are allocating a better share of funding {dollars} for AI startups, mentioned a TOI report. The utilization of AI as a tech instrument will not be new however why it’s piquing investor curiosity is as a result of its use circumstances are increasing – in India, for example, founders at the moment are wanting past enterprise tech to construct AI-led options for customers.

Naman Lahoty, associate at Stellaris Venture Partners, mentioned that the agency will double down on AI investments this 12 months. “A lot of the tech pitches we see as of late are from AI startups. However what’s most encouraging is that we’ve began seeing a variety of AI-first businesses constructing for customers as properly. We’re seeing AI corporations constructing in content material, gaming, astrology, well being and different areas. They’re providing hyper-personalised experiences in native languages at inexpensive costs,” Lahoty informed TOI.

Lightspeed has invested over $2 billion throughout greater than 100 corporations globally over the previous 12 months and the development will proceed in 2025 as properly, mentioned Hemant Mohapatra, associate on the VC agency which has backed corporations like Qure AI, Zepto and PhysicsWallah. The variety of pure play AI startups (these constructing core AI foundational fashions) in India aren’t many as of at present – estimates counsel there may very well be round a number of thousand of them however the ecosystem will develop. “The AI answer could be very a lot depending on good technical assets which isn’t a problem in India. The nation basically shall be an enormous contributor in AI area, be it pure play or as a part of different product or options providing,” mentioned Anil Joshi, managing associate at Unicorn India Ventures, about 40% of whose portfolio corporations are constructing within the AI area.

Bhavish Aggarwal’s Krutrim AI, which is already valued at $1 billion and Peak XV Companions-backed Sarvam AI, are amongst Indian startups which might be constructing AI fashions. AI startups (contains pure play AI corporations in addition to startups with robust AI use circumstances) have raised $1.2 billion in funding from traders final 12 months, knowledge sourced from market analysis agency Venture Intelligence confirmed.

AI stays within the innovation section in India and can proceed to dominate startup funding in 2025, mentioned Gaurav Kothari, principal at Prosus. “AI corporations which have demonstrated robust traction and clear indicators of product market match will entice vital development capital,” he mentioned. Sandeep Murthy, MD at Lightbox India Advisors, mentioned that it could be eager on investing in shopper tech startups that are utilizing AI successfully. “We consider tech targeted funds backing enterprise tech, SaaS fashions will see AI because the centrepiece of their funding thesis in 2025,” mentioned Murthy.(With TOI inputs)