India is very far from the “uncanny valley” of San Francisco, but it has a massive trove of engineering talent, and some of those people are hopping on the train and turning into founders and builders 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 constrained — especially compared to the billions that AI startups in the U.S. and Europe are raising. But in areas like generative AI, we’re spotting signs of where VC money is being channeled. It’s going to home-grown talent, solving problems particular to their part of the world and bringing new approaches to the same challenges their developed-country counterparts are tackling.
Some Indian startups are looking to integrate local language support into their AI models to address growing demand from Indian consumers. And a few Indian startups, such as Pepper Content and Pocket FM, are also leveraging AI to create use cases for markets beyond India and enter the U.S. market.
That’s not to say it’s been easy. In India, funding for AI startups — including those working on infrastructure and services — dropped nearly 80% in 2023 to $113.4 million from $554.7 million in 2022, according to the Tracxn data shared with Madconsole. In contrast, AI startup funding in the U.S. grew about 211% to $16.2 billion last year from $5.2 billion in 2022. To date, AI startup investments have hit a whopping $13 billion in the U.S. In that same period, just $92 million has been invested in Indian AI startups.
Dev Khare, a partner at Lightspeed Venture Partners India, told Madconsole that India has some good opportunities for AI in consumer applications, whether that is creating content in Indic languages, offering virtual influencers or creating short videos and games using AI.
“A decent majority of the market in SaaS in the last 10 years has been going off to established markets and trying to replicate those at lower cost and with better support. That very valid market has led to some large outcomes in India. But you can’t do that in a newly emerging market, like AI or native AI. You have to take a risk and say, ‘This is where the world will be a few years from now. That market doesn’t exist today, but I’m going to bet it exists. I’m going to build for that.’ That’s a bit of a newer DNA for India. We’ve seen that happen,” he said.
In the last 18 months, Lightspeed India and SEA has invested over $150 million in AI, which includes new investments and follow-ons in existing AI-enabled startups. Globally, the fund has invested more than $1 billion across over 70 companies in AI in the same period.
Global and local investors are actively scouting for AI startups in India, as the country helps them diversify their portfolios and is in a better position amid ongoing geopolitical conflicts in significant markets. Growing data sovereignty concerns across nations also give a reason to look for local startups building promising solutions for the world’s most populous country.
Indian AI startups that have raised the most money
Founder: Bhavish Aggarwal
Total funding 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, valued at $1 billion on just $50 million of money raised. Launched in December 2023 in Bengaluru, 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 a backlash upon its public beta launch over inaccurate results. The startup claims its AI model improves through regular updates.
Founders: Vivek Raghavan and Pratyush Kumar
Total funding raised: $41 million
Key investors: Lightspeed Venture Partners, Peak XV Partners and Khosla Ventures
Sarvam AI (Telugu for “everything”) is India’s other high-profile startup working on LLMs based on Indian languages. The startup was co-founded by Vivek Raghavan and Pratyush Kumar, who both worked previously with tech veteran Nandan Nilekani on IIT Madras’ project AI4Bharat. The Bengaluru-based startup emerged from stealth in December and aims to offer full-stack generative AI offerings, including a platform to let enterprises develop GenAI apps based on Sarvam’s LLM and contribute to open source models and datasets. In February, Sarvam AI partnered with Microsoft to launch voice-based AI tools and bring its Indic voice LLM to Azure.
Founders: Ashwini Asokan and Anand Chandrasekaran
Total funding 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, co-founded by the neuroscientist-designer couple Ashwini Asokan and Anand Chandrasekaran in 2016, initially introduced its vision tech for the retail segment, though it expanded to verticals, including finance, insurance, healthcare and logistics. Its bigger vision goes beyond its home market, per its mission: “to make people all over the globe A.I natives.”
Founders: Jo Aggarwal and Ramakant Vempati
Total funding 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 offer an “emotionally intelligent” therapist chatbot that helps users talk through their feelings. Managed by Wysa’s mental health professionals, the chatbot is used by over 6.5 million people across more than 95 countries and diverse age groups. The Bengaluru-based startup, which also has operations in Boston and London, raised $20 million in July 2022. It was co-founded by Jo Aggarwal and her husband, Ramakant Vempati, in 2016 after Aggarwal fell into a deep depression.
Founders: Sharad Sanghi and Anindya Das
Total funding 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 variety of generative AI platforms and services to businesses to let them 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 and multi-input observability and lets users preemptively identify issues using a unified data lake and preexisting telemetry datasets. The Aegis platform focuses on AI/ ML security.
Here are some emerging Indian AI startups to watch
Founders: Mahek Mody and Mohit Sharma
Total funding raised: $5.5 million
Key investors: Khosla Ventures and Draper Associates
Upliance AI brings 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 bolster its market presence.
Founders: Venkata Pingali and Indrayudh Ghoshal
Total funding raised: $2.3 million
Key investor: Blume Ventures
Scribble Data offers domain-specific AI assistants to large North American and European insurers to help them scale their back-end business capacity. It is headquartered in Bengaluru and has a sales team in Toronto.
Founders: Kanishk Shukla and Akshay Gugnani
Total funding raised: $1.3 million
Key investors: Chiratae Ventures, Endiya Partners and Entrepreneur First
Expertia AI, based in Bengaluru, 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 the lead investor, with participation from existing investors.
Founders: Anuj Srivastava and Priyesh Srivastava
Total funding 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 that work in areas ranging from equity research to compliance to wealth advisory.
Founders: Shray Arora and Sidharth Sahni
Total funding raised: $550,000
Key investor: Merak Ventures
Helium, based in Delhi, helps e-commerce brands with direct-to-consumer web stores with AI and reactive headless storefronts.
Founder: Abhishek Upperwal
Total funding raised: $140,000
Soket Labs, based in Bengaluru and Gurugram, is an AI research firm that developed 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.
Founders: Pratik Desai
Based in Surat with an extended office in the Bay Area, KissanAI 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 is backed 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.
Founders: Pawan Prabhat and Paramdeep Singh
Shorthills AI, based in Gurugram, was founded in June 2018 by Pawan Prabhat and Paramdeep Singh. The pair previously founded the accounting training platform EduPristine. The bootstrapped startup builds custom AI tools for enterprises and has NHS and PwC among its early 12 customers in the U.S. and India.
