India is a far cry from San Francisco’s “uncanny valley,” but it has a huge pool of engineering talent, and some of them are jumping on the train and becoming founders and creators of AI startups.
The story of the AI startup ecosystem in India today is reminiscent of the early days of SaaS in the country: funding is limited – especially compared to the billions of dollars being raised by AI startups in the US and Europe. But in sectors such as Generative AIWe are seeing signs of where VC money is being invested. It is going to homegrown talent, solving problems in their part of the world and bringing fresh perspectives to the same challenges their developed country counterparts are tackling.
Some Indian startups are looking at integrating local language support into their AI models to meet the growing demand of Indian consumers. And some Indian startups, such as Paper Content and Pocket FM, are also leveraging AI to create use cases for markets beyond India and enter the US market.
That doesn’t mean it’s been easy. In India, funding for AI startups – including those working on infrastructure and services – dropped by nearly 80% from $554.7 million to $113.4 million in 2022, Tracxn data shared with TechCrunch shows. In contrast, AI startup funding in the US grew by nearly 211% to $16.2 billion last year from $5.2 billion in 2022. To date, AI startup investments in the US have reached $13 billion. In the same period, only $92 million has been invested in Indian AI startups.
Dev Khare, partner at Lightspeed Venture Partners India, told TechCrunch that there are some good opportunities for AI in consumer applications in India, be it creating content in Indian languages, offering virtual influencers, or creating short videos and games using AI.
“A large part of the SaaS market over the last 10 years has been going to established markets and trying to replicate them with lower costs and better support. That very legitimate market has produced some great results in India. But you can’t do that in a new emerging market like AI or basic AI. You have to take a risk and say, ‘This is where the world will be in a few years. That market doesn’t exist today, but I’ll bet it does. I’m going to build for that.’ That’s a new DNA for India. We’ve seen that happen,” he said.
Over the past 18 months, Lightspeed India and SEA have invested over $150 million in AI, including new investments and follow-ons in existing AI-enabled startups. Globally, the fund has invested over $1 billion in over 70 companies in AI over the same period.
Global and local investors are actively looking for AI startups in India, as the country helps them diversify their portfolios and is better positioned amid ongoing geopolitical conflicts in key markets. Growing concerns over data sovereignty across nations also give the world’s most populous country a reason to look for local startups building promising solutions.
Indian AI startups that have raised the most funding
Krutrim
founded by: Bhavish Aggarwal
Total Funds Raised: $50 million
Key Investors: Matrix Partners India
Led by Ola founder Bhavish Aggarwal, Krutrim (Hindi of Sanskrit origin meaning “artificial”) is India’s first unicorn AI startup, worth $1 billion Only $50 million has been raised. Launched in Bengaluru in December 2023, Krutrim is building a large language model (LLM) based on Indian languages and English. Earlier this year, it introduced an AI chatbot, which (not unlike its Western counterparts) Saw the response Startup claims false positives on its public beta launch Its AI model improves through regular updates,
Sarvam AI
founded by: Vivek Raghavan and Pratyush Kumar
Total Funds Raised: $41 million
Key Investors: Lightspeed Venture Partners, Peak XV Partners and Khosla Ventures
Sarvam AI (“everything” in Telugu) is another high-profile startup from India working on LLM based on Indian languages. Co-founded by Vivek Raghavan and Pratyush Kumarwho previously worked with tech veteran Nandan Nilekani on IIT Madras’s Project AI4Bharat. The Bengaluru-based startup emerged from stealth in December and aims to offer full-stack generative AI offerings, including giving enterprises a platform to develop GenAI apps based on Sarvam’s LLM and contribute to open source models and datasets. In February, Sarvam AI Partnership with Microsoft To launch voice-based AI tools and bring its Indic Voice LLM to Azure.
Mad Street Den
founded by: Ashwini Ashokan and Anand Chandrasekaran
Total Funds Raised: $57.4 million
Key Investors: Avatar Growth Capital, Sequoia Capital and Alpha Wave Global
Computer vision startup Mad Street Den is building AI solutions for enterprise customers. The Chennai-based startup was founded in 2016 by neuroscientist-designer couple Ashwini Ashokan and Anand Chandrasekaran. It initially introduced its vision technology for the retail segment, though it expanded to verticals including finance, insurance, healthcare, and logistics. Its larger vision goes beyond its home market, according to its mission: “To make people AI natives all over the world.”
Vysa
founded by: Joe Aggarwal and Ramakant Vempati
Total Funds Raised: $25 million
Key Investors: HealthQuad, W Health, British International Investment and Google Assistant Fund
Wysa is a mental health tech startup that uses AI to provide an “emotionally intelligent” therapist chatbot that helps users talk about their feelings. Managed by Wysa’s mental health professionals, the chatbot is used by over 6.5 million people across 95 countries and different age groups. The Bengaluru-based startup, which also has operations in Boston and London, Raised $20 million in July 2022It was founded by Jo Agarwal and her husband Ramakant Vempati in 2016 after Agarwal went into a deep depression.
Neysa Networks
founded by: Sharad Sanghi and Anindya Das
Total Funds Raised: $20 million
Key Investors: Matrix Partners India, Nexus Venture Partners and NTTVC
Mumbai-based Neysa Networks is led by seasoned tech entrepreneur Sharad Sanghi, who previously founded cloud and data company Netmagic Solutions. It offers a range of generative AI platforms and services for businesses to deploy AI and machine learning. The startup’s Nebula platform is used to scale AI projects using on-demand GPU infrastructure and to train and infer AI models on the cloud. The company’s Pulvera platform offers multi-vendor and multi-input observability and lets users identify issues in advance using a unified data lake and pre-existing telemetry datasets. The Aegis platform focuses on AI/ML security.
Here are some emerging Indian AI startups to keep an eye on
Appliances AI
founded by: Mehak Modi and Mohit Sharma
Total Funds Raised: $5.5 million
Key Investors: Khosla Ventures and Draper Associates
Appliance AI brings AI to home appliances so people can cook over 500 new dishes at home. The Bengaluru-based startup plans to raise $10 million to $15 million early next year to strengthen its market presence.
Scribble Data
founded by: Venkat Pingali and Indrayudha Ghoshal
Total Funds Raised: $2.3 million
Key Investors: Bloom Ventures
Scribble Data provides domain-specific AI assistants to large North American and European insurers to help them enhance their back-end business capability. It is headquartered in Bengaluru and has a sales team in Toronto.
Expertia AI
founded by: Kanishk Shukla and Akshay Gugnani
Total Funds Raised: $1.3 million
Key Investors: Chiratae Ventures, Endiya Partners and Entrepreneur First
Bengaluru-based Expertia AI helps businesses automate their recruitments using AI and reduces hiring time to 24 hours. It automates sourcing, screening, outreach, engagement, assessment, interviewing, and scheduling using proprietary deep-learning algorithms. The startup is currently raising $3 million from a lead investor with participation from existing investors.
Onfinance
founded by: Anuj Srivastava and Priyesh Srivastava
Total Funds Raised: $1.1 million
Key Investors: Silverneedle Ventures, Indian Angel Network and LetsVenture
Bengaluru-based OnFinance helps banks and wealth management companies with its AI co-pilots, who work in areas ranging from equity research to compliance and wealth advice.
Helium
founded by: Shrey Arora and Siddharth Sahni
Total Funds Raised: $550,000
Key Investors: Merak Ventures
Delhi-based Helium helps e-commerce brands open direct-to-consumer web stores with AI and reactive headless storefronts.
Socket Labs
founded by: Abhishek Uparwal
Total Funds Raised: $140,000
Socket Labs, based in Bengaluru and Gurugram, is an AI research firm that has developed the open source Pragna-1B multilingual LLM through its in-house GenAI Studio. It plans to raise $7 million in a seed round in two-three months.
Farmer AI
founded by: Prateek Desai
Based in Surat and with an extended office in the Bay Area, KisanAI serves agriculture and adjacent domains using its GenAI platform Agricopilot and a family of domain-specific Agri LLMs, Dhenu. The startup is currently bootstrapped and supported by the founder’s family and friends, though it plans to raise $3 million to $4 million in a round between Seed and Series A.
Shorthills AI
founded by: 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 bootstrapped startup builds custom AI tools for enterprises and counts the NHS and PwC among its initial 12 customers in the US and India.
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