India is a long way from the “uncanny valley” of San Francisco, but it has a huge treasure trove of engineering talent, and some of these people are jumping on the train and turning into founders and builders of AI startups.
The story of India’s AI startup ecosystem today is reminiscent of the early days of software-as-a-service in the country: funding is tight — especially compared to the billions raised by AI startups in the US and Europe. But in areas like generative AI, we’re seeing signs of where venture capital money is being directed. It’s targeting homegrown talent, solving problems specific to their part of the world, and coming up with new approaches to the same challenges their counterparts in developed countries are grappling with.
Some Indian startups are looking to incorporate local language support into their AI models to meet the growing demand from Indian consumers. Some Indian startups, such as Pepper Content and Pocket FM, are also leveraging AI to create use cases for markets outside India and enter the US market.
This doesn’t mean it was easy. In India, funding for AI startups — including those working in infrastructure and services — fell nearly 80% in 2023 to $113.4 million from $554.7 million in 2022, according to Tracxn data shared with TechCrunch. In contrast, funding for AI startups in the US grew nearly 211% to $16.2 billion last year from $5.2 billion in 2022. To date, investments in AI startups have reached $13 billion. In the United States, in the same period, only $92 million was invested. In Indian startups in the field of artificial intelligence.
Dev Khare, partner at Lightspeed Venture Partners India, told TechCrunch that India has some good opportunities for AI in consumer applications, whether it is creating content in Indian languages, introducing virtual influencers or creating short videos and games using AI.
“The majority of the SaaS market in the last 10 years has gone into established markets and trying to replicate them at a lower cost and with better support. This very viable market has led to some big results in India. But you can’t do that in a newly emerging market, like AI or A.I. Original. You have to take a risk and say, “This is where the world will be a few years from now.” This market doesn’t exist today, but I bet it does. I will build for that. This is kind of the new DNA of India. We have seen it happen,” he said.
Over the past 18 months, Lightspeed India and SEA have invested more than $150 million in AI, including new and follow-on investments in existing AI startups. Globally, the fund invested more than $1 billion in more than 70 AI companies during the same period.
Global and local investors are actively looking for AI startups in India, as the country helps them diversify their investment portfolios and is better positioned amid the ongoing geopolitical conflicts in important markets. Growing concerns about data sovereignty across countries also give reason to look for local startups building promising solutions for the world’s most populous country.
Indian AI startups that have raised the most funds
Founder: Bhavesh Agrawal
Total Funding Raised: 50 million dollars
Main investors: Matrix Partners India
Led by Ola founder Bhavesh Agarwal, Krutrim (Sanskrit for “artificial”) is India’s first AI startup, valued at $1 billion from just $50 million in funds raised. Launched in December 2023 in Bengaluru, Krutrim is building a large language model (LLM) based on Hindi and English. Earlier this year, it introduced an AI-powered chatbot, which (not unlike its Western counterparts) saw a backlash When the public beta was launched due to inaccurate results, the startup claims Its AI model improves with regular updates..
Founders: Vivek Raghavan and Pratyush Kumar
Total Funding Raised: $41 million
Main investors: Partners: Lightspeed Venture, Peak XV Partners, Khosla Ventures
Sarvam AI (Telugu for “everything”) is another high-profile startup in India working on an MBA based on Indian languages. The startup was co-founded by Vivek Raghavan and Pratyush Kumar, who previously worked with tech veteran Nandan Nilekani on IIT Madras’ AI4Bharat project. The Bengaluru-based startup emerged from stealth in December and aims to offer a full-fledged generative AI offering, including a platform to let enterprises develop GenAI applications based on Sarvam’s LLM and contribute to open-source models and datasets. In February, Sarvam AI Partnership with Microsoft Launching voice-based AI tools and bringing its Indian Voice LLM software to Azure.
Founders: Ashwini Asokan and Anand Chandrasekaran
Total funding raised: $57.4 million
Main investors: Avatar Growth Capital, Sequoia Capital, and Alpha Wave Global
Computer vision startup Mad Street Den is building AI solutions for enterprise clients. The Chennai-based startup, co-founded by neuroscientist-designer husband and wife Ashwini Asokan and Anand Chandrasekaran in 2016, initially introduced its vision technology to the retail sector, though it has expanded to verticals including finance, insurance, healthcare, and logistics. Its larger vision goes beyond its home market, according to its mission: “to make people around the world AI citizens.”
Founders: Joe Aggarwal and Ramakant Vempati
Total funding raised: $25 million
Main investors: HealthQuad, W Health, British International Investment and Google Assistant Fund
Wysa is a mental health tech startup that uses artificial intelligence to deliver an “emotionally intelligent” therapist chatbot that helps users talk about their feelings. The chatbot, run by mental health professionals at Wysa, is used by more than 6.5 million people in more than 95 countries and different age groups. The Bengaluru-based startup, which also operates in Boston and London, raised $20 million in July 2022. It was co-founded by Joe Aggarwal and her husband Ramakant Vempati in 2016 after Aggarwal fell into severe depression.
Founders: Sharad Sanghi and Anindya Das
Total Funding Raised: 20 million dollars
Main Investors: Matrix Partners India, Nexus Venture Partners and NTVC
Mumbai-based Nesa Networks is led by veteran tech entrepreneur Sharad Sanghi, who previously founded cloud and data company Netmagic Solutions. The company offers a range of generative AI platforms and services to enterprises to enable them to deploy AI and machine learning. The startup’s Nebula platform is used to scale AI projects using on-demand GPU infrastructure and train and infer AI models on the cloud. The company’s Palvera platform provides multi-vendor, multi-input monitoring and allows users to proactively identify issues using a unified data lake and pre-existing telemetry datasets. The Aegis platform focuses on AI/ML security.
Here are some Indian AI startups to keep an eye on
Founders: Mehek Modi and Mohit Sharma
Total Funding Raised: $5.5 million
Main Investors: Khosla Ventures and Draper Associates
Upliance AI is bringing AI to home appliances to let people cook over 500 new dishes at home. The Bengaluru-based startup plans to raise $10 million to $15 million early next year to boost its market presence.
Founders: Venkata Pingali and Indrayudha Ghoshal
Total funding raised: $2.3 million
Main investor: Bloom Ventures
Scribble Data provides AI assistants to major insurance companies in North America and Europe to help them scale their back-end businesses. It is headquartered in Bengaluru with a sales team in Toronto.
Founders: Kanishk Shukla and Akshay Gugnani
Total funding raised: $1.3 million
Main Investors: Chiratae Ventures, Endiya Partners, and Entrepreneur First
Bengaluru-based startup Expertia AI helps companies automate recruitment processes using AI and reduce hiring time to 24 hours. It also automates the employee search, screening, communication, engagement, evaluation, interviewing and scheduling process using its deep learning algorithms. The startup is currently raising $3 million from a lead investor, with participation from existing investors.
Founders: Anuj Srivastava and Priyesh Srivastava
Total Funding Raised: $1.1 million
Main investors: Silverneedle Projects, Indian Angel Network and LetsVenture
Bengaluru-based OnFinance helps banks and wealth management firms with its AI assistants that work in areas ranging from equity research to compliance to wealth advisory.
Founders: Shri Arora and Siddharth Sahni
Total Funding Raised: $550,000
Main investor: Mirak Projects
Delhi-based Helium helps e-commerce brands with direct-to-consumer web stores using artificial intelligence and headless interactive storefronts.
Founder: Abhishek Abrawal
Total Funding Raised: $140,000
Bengaluru-based Soket Labs, an AI research firm that has developed the open-source multilingual Pragna-1B through its GenAI Studio, plans to raise $7 million in a seed funding round in two to three months.
Founders: Pratik Desai
Headquartered in Surat with an extended office in the Gulf region, KissanAI serves agriculture and adjoining domains using its GenAI platform AgriCopilot and a suite of domain-specific Agri LLMs, Dhenu. The startup is currently being seeded and backed by the founder’s family and friends, though it plans to raise between $3 million and $4 million in a seed and Series A round.
Founders: Pawan Prabhat and Paramdeep Singh
Gurugram-based Shorthills AI was founded in June 2018 by Pawan Prabhat and Paramdeep Singh. The duo previously founded accounting training platform EduPristine. The self-funded startup builds custom AI tools for businesses and counts the NHS and PwC among its top 12 clients in the US and India.