India might be distant from San Francisco's "uncanny valley," but it boasts a wealth of engineering talent, with many individuals transitioning to become founders and innovators in the AI startup landscape. The current AI startup ecosystem in India mirrors the early days of SaaS in the country: funding remains limited — especially when compared to the billions being raised by AI ventures in the U.S. and Europe. However, in sectors like generative AI, we can identify where venture capital is being invested. The focus is on home-grown talent, addressing region-specific issues while introducing novel solutions to challenges faced by their counterparts in developed nations.
Several Indian startups are prioritizing local language integration into their AI models, catering to the increasing demand from consumers in India. Notably, firms like Pepper Content and Pocket FM are utilizing AI to expand their market reach beyond India, targeting the U.S. as well.
The journey hasn’t been without its hurdles. According to Tracxn data shared, funding for AI startups in India, which includes those focusing on infrastructure and services, plummeted nearly 80% in 2023, falling to $113.4 million from $554.7 million in 2022. In contrast, AI startup funding in the U.S. surged by approximately 211%, soaring to $16.2 billion in 2023 from $5.2 billion the previous year. To date, investments in U.S. AI startups have reached an astounding $13 billion, while Indian AI startups attracted merely $92 million in the same timeframe.
Dev Khare, a partner at Lightspeed Venture Partners India, emphasized the potential for AI in consumer applications within India. He noted, “A substantial portion of the SaaS market over the last decade has focused on established markets, aiming to replicate at a lower cost with better support. However, this strategy doesn’t apply to emerging markets like AI. You need to embrace risk, envision where the market will be in the future, and build for that potential gap. This shift in mindset is essential for India’s progress, and we're beginning to see it.”
In the past 18 months, Lightspeed India and Southeast Asia have invested over $150 million in AI, which includes new investments and follow-ups in existing AI-enabled ventures. Globally, this fund has invested more than $1 billion across over 70 AI-related companies during the same period.
With local and global investors actively seeking AI startups in India, the country presents an attractive opportunity for portfolio diversification amidst rising geopolitical tensions in key markets. Additionally, growing data sovereignty concerns across nations provide further rationale for investing in local startups offering promising solutions tailored to the world’s most populous nation.
Top Indian AI Startups by Funding
1. Krutrim
- Founder: Bhavish Aggarwal
- Total Funding Raised: $50 million
- Key Investors: Matrix Partners India
Krutrim, led by Ola founder Bhavish Aggarwal, stands as India’s first unicorn AI startup, valued at $1 billion despite raising $50 million. Founded in December 2023 in Bengaluru, Krutrim is working on a large language model (LLM) that incorporates Indian languages and English. Earlier this year, it unveiled an AI chatbot that encountered criticism during its public beta for inaccuracies, but the startup assures improvements through continuous updates.
2. Sarvam AI
- Founders: Vivek Raghavan and Pratyush Kumar
- Total Funding Raised: $41 million
- Key Investors: Lightspeed Venture Partners, Peak XV Partners, Khosla Ventures
Emerging from stealth in December, Sarvam AI (Telugu for "everything") focuses on LLMs tailored for Indian languages. Co-founders Vivek Raghavan and Pratyush Kumar previously collaborated with tech veteran Nandan Nilekani on IIT Madras’s AI4Bharat initiative. The Bengaluru-based startup aims to offer comprehensive generative AI services, including a platform for enterprises to develop GenAI applications and contribute to open-source datasets. In February, Sarvam AI partnered with Microsoft to launch voice-driven AI tools and integrate its Indic voice LLM into Azure.
3. Mad Street Den
- Founders: Ashwini Asokan and Anand Chandrasekaran
- Total Funding Raised: $67 million
- Key Investors: Avatar Growth Capital, Peak XV Partners, Alpha Wave Global
Chennai-based Mad Street Den specializes in computer vision solutions for enterprises. Co-founded in 2016 by neural scientist Ashwini Asokan and designer Anand Chandrasekaran, the company began its journey in retail tech, expanding across finance, insurance, healthcare, and logistics. Their mission is to create “A.I. natives” globally.
4. Wysa
- Founders: Jo Aggarwal and Ramakant Vempati
- Total Funding Raised: $25 million
- Key Investors: HealthQuad, W Health, British International Investment, Google Assistant Fund
Wysa is a mental health tech venture that leverages AI to provide an "emotionally intelligent" chatbot designed to assist users in discussing their feelings. With over 6.5 million users across 95 countries, the Bengaluru startup raised $20 million in July 2022. Co-founders Jo Aggarwal and Ramakant Vempati launched the startup in 2016 after Aggarwal experienced severe depression.
5. Neysa Networks
- Founders: Sharad Sanghi and Anindya Das
- Total Funding Raised: $20 million
- Key Investors: Matrix Partners India, Nexus Venture Partners, NTTVC
Neysa Networks, based in Mumbai, is led by tech entrepreneur Sharad Sanghi, previously of Netmagic Solutions. The startup provides a range of generative AI platforms enabling businesses to incorporate AI and machine learning capabilities, including the Nebula platform for on-demand GPU infrastructure and the Aegis platform focused on AI/ML security.
Emerging Indian AI Startups to Watch
1. Upliance AI
- Founders: Mahek Mody and Mohit Sharma
- Total Funding Raised: $5.5 million
- Key Investors: Khosla Ventures, Draper Associates
Upliance AI innovates home appliances with AI to enable users to cook over 500 new dishes. The Bengaluru startup is set to raise $10 to $15 million early next year to expand its market presence.
2. Scribble Data
- Founders: Venkata Pingali and Indrayudh Ghoshal
- Total Funding Raised: $2.3 million
- Key Investor: Blume Ventures
Headquartered in Bengaluru with a sales presence in Toronto, Scribble Data provides domain-specific AI assistants to major North American and European insurers, enhancing their back-end business capacity.
3. Expertia AI
- Founders: Kanishk Shukla and Akshay Gugnani
- Total Funding Raised: $1.3 million
- Key Investors: Chiratae Ventures, Endiya Partners, Entrepreneur First
Bengaluru-based Expertia AI streamlines recruitment for businesses using AI, reducing hiring time to just 24 hours. The startup is currently seeking $3 million from existing investors.
4. OnFinance
- Founders: Anuj Srivastava and Priyesh Srivastava
- Total Funding Raised: $1.1 million
- Key Investors: Silverneedle Ventures, Indian Angel Network, LetsVenture
OnFinance, located in Bengaluru, offers AI-driven tools for banks and wealth management firms, supporting areas like equity research and compliance.
5. Helium
- Founders: Shray Arora and Sidharth Sahni
- Total Funding Raised: $550,000
- Key Investor: Merak Ventures
Delhi-based Helium helps e-commerce brands establish direct-to-consumer web stores by developing AI and reactive headless storefronts.
6. Soket Labs
- Founder: Abhishek Upperwal
- Total Funding Raised: $140,000
Soket Labs, based in Bengaluru and Gurugram, is dedicated to AI research and has created the open-source Pragna-1B multilingual LLM through its in-house GenAI Studio, planning to raise $7 million in an upcoming seed round.
7. Kissan AI
- Founder: Pratik Desai
With bases in Surat and the Bay Area, Kissan AI targets agriculture and related fields using its GenAI platform, AgriCopilot. The startup, currently self-funded, aims to secure $3 to $4 million between seed and Series A rounds.
8. Shorthills AI
- Founders: Pawan Prabhat and Paramdeep Singh
Founded in June 2018, Shorthills AI focuses on developing customized AI tools for enterprises, successfully serving clients in both the U.S. and India.
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