The AI startup ecosystem in India is on the rise, with a growing number of founders and builders entering the market. While funding for AI startups in India is still limited compared to the US and Europe, there are signs of investment in areas like generative AI. Indian startups are focusing on solving problems specific to their country and bringing new approaches to challenges faced by developed countries.
One area of focus for Indian startups is integrating local language support into their AI models. This is in response to the increasing demand from Indian consumers, who prefer to interact with AI systems in their native language. Some startups, such as Pepper Content and Pocket FM, are also leveraging AI to create use cases for markets beyond India and enter the US market.
However, the funding landscape for AI startups in India is challenging. In 2023, funding for AI startups in India dropped nearly 80% to $113.4 million, while in the US, AI startup funding grew by 211% to $16.2 billion. Despite this, investors are actively seeking out AI startups in India as a way to diversify their portfolios and mitigate geopolitical risks.
Lightspeed Venture Partners India is one of the investors betting big on AI in India. In the last 18 months, they have invested over $150 million in AI startups in India and Southeast Asia. They believe there are good opportunities for AI in consumer applications, such as creating content in local languages and offering virtual influencers.
Several Indian AI startups have already made a name for themselves. Krutrim, led by Ola founder Bhavish Aggarwal, is India’s first unicorn AI startup. It has raised $50 million and is building a large language model based on Indian languages and English. Sarvam AI, co-founded by Vivek Raghavan and Pratyush Kumar, aims to offer full-stack generative AI offerings based on Indian languages. Mad Street Den, a computer vision startup, is building AI solutions for enterprise customers. And Wysa, a mental health tech startup, uses AI to offer an “emotionally intelligent” therapist chatbot.
There are also several emerging Indian AI startups to watch. Upliance AI brings AI to home appliances, allowing people to cook over 500 new dishes at home. Scribble Data offers domain-specific AI assistants to insurers in North America and Europe. Expertia AI helps businesses automate their recruitments using AI, reducing hiring time to 24 hours. OnFinance provides AI co-pilots to banks and wealth management companies. Helium helps e-commerce brands with direct-to-consumer web stores using AI. Soket Labs is an AI research firm that developed an open-source multilingual language model. Kissan AI serves the agriculture industry with its GenAI platform. And Shorthills AI builds custom AI tools for enterprises.
Overall, while the funding landscape for AI startups in India is challenging, there is a growing ecosystem of startups leveraging AI to solve problems and create innovative solutions. Investors are taking notice of the potential in India’s AI market, and local startups are bringing new approaches and solutions to the table. With continued support and investment, the Indian AI startup ecosystem has the potential to thrive and make a significant impact on the industry.