India’s GenAI Funding Summer Begins

This week, India witnessed its first AI Unicorn, Krutrim AI, which raised $50 million in funding from Matrix Partners and other investors to build India’s first complete AI computing stack. Another AI startup, RagaAI, built by former NVIDIA and Ola exec Gaurav Agarwal, came out of stealth mode with the announcement of $4.7 million in funding to build the world's first automated platform to fix AI models from failing.

The funding season has barely begun, with Indian VCs sitting on $20 billion of dry powder, and AI, notably GenAI, is clearly on everyone's mind. A majority of the VCs are slowly transitioning to become AI leaders, not just companies.?

"India has $20 billion of dry powder, that is INR 1.6 lakh crore of venture capital dry powder, waiting to be invested. The number one thing we're all going after is AI," said Peak XV Partners MD Rajan Anandan, adding that it has 400 active companies in India, of which about 100 are software product companies targeting the world, and 25 are AI companies.?

Last year, Sarvam AI raised $41 million in Series A funding led by Lightspeed Venture Partners, with participation from Peak XV Partners and Khosla Ventures. YC-backed Bengaluru-based LLM startup Giga ML secured seed funding of $3.6 million in a round led by Nexus Venture Partners, with participation from Liquid 2 Ventures, 8vdX and angel investors.?

Meanwhile, Google wants to invest about $4 million in Indian conversational AI startup CoRover. There are also rumours about AI4Bharat researchers considering raising $12 million from Peak XV Partners and Lightspeed Venture Partners for an AI startup. Reliance Jio, on the other hand, has partnered with IIT Bombay to build BharatGPT and is looking to make significant investments in the coming years.?

India currently has about 100 generative AI startups, and the ecosystem has cumulatively raised $700 million in the past three years. Over $500 million in funding was raised by 24 generative AI startups in 2023, as revealed by Tracxn. This year, the numbers are going to increase significantly, given the rise in demand for generative AI services and products across industries, particularly in the areas of coding, healthcare and education.?

AIM predicts that the funding amount will increase multifold this year, infusing nearly $2-3 billion into the Indian AI-first startup ecosystem, particularly generative AI companies, as seen globally last year.?

Last year, SenseAI announced the launch of a $25 million AI fund (INR 200 crore), which aims to invest in 18-20 AI-first startups from seed to Pre-Series A stages. Together also announced a $150 million early-stage fund to back AI startups. Many more funds focused on AI and deep tech will be launched in the coming months from big tech as well as early- to late-stage VC firms.?

On the demand side, nearly 84% of Indian CEOs are raising new capital or reallocating budgets to invest in generative AI, compared to 70% globally. As per Infosys Knowledge Institute (IKI), the research arm of Infosys, the generative AI spending in APAC will triple in 2024, expected to surpass $3 billion.

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MLDS 2024?

India’s biggest generative AI conference is barely a month away. Have you booked your spots yet for some insightful sessions, presentations and networking??

Date: February 1-2, 2024?

Location: NIMHANS Convention Centre, Bengaluru

Register now.

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• Infosys will use generative AI to enhance fan engagement, optimise player performance and facilitate digital content creation at the 2024 Australian Open (AO).?