Over the years, India has emerged as a magnet for investments in the field of artificial intelligence (AI). Despite a funding winter in the startup ecosystem, AI companies in India seem to be immune to the slowdown. According to data from the Tracxn platform, Indian AI companies attracted the highest annual funding in 2022, raising a staggering $402 million. In 2023, they secured $146 million in funding. And in just the first two months of 2024, AI startups in India have already raised $55 million.
One notable AI company leading the charge is Krutrim AI, founded by Bhavesh Agarwal, the founder of Ola. In just one year, Krutrim AI has gathered $50 million in funding, making it the fastest-growing and most valued unicorn in the country.
Venture capital firms are racing to find the next big winner in this technology sector. The emergence of OpenAI in 2022 placed the AI community at the forefront of the game-changing technologies. “It’s an exceptional field, just like OpenAI was a big winner, India will have its moment,” says Madhu Shalini Iyer, the Managing Partner at Rocketship.vc. With over 550 Indian companies in the AI sector, the total funding in the industry exceeds $1.2 billion to date, according to Neha Singh, co-founder of Tracxn.
Investors fear missing out on the opportunity to invest in AI technology, which may explain the continued support for AI investments in India. “The funding in AI companies has intensified manyfold in the last year, based on our market research. This sector is still in its early stages, and only a handful of companies are receiving substantial investments. The market is highly overvalued; for any AI company, there is a FOMO phenomenon, as people do not want to miss the chance in this sector,” explains V Laxmikanth, Managing Partner at Pavestone Capital.
Whether it’s the quest for the next big disruptor or the potential return on investment, there is a strong belief that AI technology holds immense value and untapped potential. As the AI revolution continues to unfold, India remains a hotbed for AI investments, attracting funding and creating a thriving ecosystem.
1. What is Krutrim AI and who founded it?
Krutrim AI is an Indian AI company founded by Bhavesh Agarwal, the founder of Ola. It is the first unicorn of the year in India.
2. How much funding has Krutrim AI raised?
Krutrim AI has raised $50 million in funding.
3. How are AI companies in India affected by the funding winter?
Unlike other startups, AI companies in India continue to attract significant funding even during the funding winter.
4. How much funding have AI companies in India raised in recent years?
According to Tracxn, Indian AI companies raised $402 million in 2022, $146 million in 2023, and $55 million in just the first two months of 2024.
5. How many Indian AI companies are there, and how much total funding have they received?
There are over 550 Indian AI companies, with a total funding exceeding $1.2 billion.
6. What drives investors to support AI investments?
Investors fear missing out on the opportunity to invest in AI technology, leading to continued support for AI investments.
7. What do venture capital firms think about the AI market in India?
Venture capital firms acknowledge the overvaluation in the AI market but believe that substantial opportunities exist and are actively seeking the next big player.