Recently, Indian startups have been receiving a number of flak. This began with union minister Piyush Goyal calling out the “fancy ice-cream” downside of Indian startups, implying that there’s not sufficient deep tech analysis taking place in India. This was additionally a jab at Indian traders, like those in Shark Tank, who don’t spend money on deep tech startups.
Anupam Mittal, founding father of Shaadi.com and in addition one of many Sharks from Shark Tank India, probably responding to Goyal’s latest comment, mentioned, “There isn’t any tech in India,” in a latest dialogue with Nikhil Aggarwal, founder and group CEO of Grip.
Giving examples of tech giants like NVIDIA, Google, Meta, and Apple, Mittal mentioned that these Western corporations function on bigger margins to change into billion-dollar enterprises inside a number of years. Then again, he notes that tech corporations take a number of time in India. “India has a number of tech-enabled corporations, not pure-play tech ones,” he mentioned.
Mittal, giving Zomato for instance, mentioned that such corporations can not operate with out expertise however are merely tech-enabled corporations.
However is that this true?
The fact appears totally different from what Mittal says. As reported by AIM earlier, VCs are actively taking an curiosity in a few of the deep tech startups in AI, robotics, and {hardware}. That mentioned, the investments are restricted for corporations to scale.
Narendra Bhandari, accomplice at early-stage enterprise capital agency Seafund, talking with AIM earlier, mentioned, “There’s by no means sufficient tech investments. There’s by no means sufficient concentrate on deep tech.”
He believes India has an extended approach to go. “We want extra of it, much more of it,” he mentioned. “We have to repeatedly make investments at a personal degree and at a authorities degree.”
Equally, Vaas Bhaskar, accomplice at Elevation Capital, believes AI is changing into a foundational factor, not simply an added function. “Simply the best way they’re architecting themselves from day zero, how the engineering, service and product groups are operating, it’s fairly totally different,” he advised AIM.
Learn: Indian VCs Want to Invest in Deep-Tech Startups Despite Govt Skepticism
A latest Tracxn report, shared completely with AIM, reveals that whole funding for AI startups plunged by 53% year-on-year. It decreased from $305.9 million in FY 2023-24 to $143.6 million in FY 2024-25, alongside a 44% drop in funding rounds.
In the meantime, knowledge from analytics agency Dealroom reveals that international AI startups secured $110 billion in 2024, a 62% improve from the earlier 12 months. US-based startups accounted for round 42% ($46.2 billion) of the overall funding.
Firms like Zoho, Meesho, Zomato, Swiggy, InMobi, and Ola could also be scaling in that course. Nonetheless, a tangible tech product like Microsoft’s Home windows or NVIDIA’s GPUs has not been born out of India.
There are an growing variety of startups just like the government-backed Sarvam AI or others like Soket AI, Gnani.ai, CoRover, or a number of house tech corporations, however in line with Mittal’s evaluation, they aren’t constructing software program or tech for the world to make use of.
In a earlier interplay with AIM, Debarghya (Deedy) Das of Menlo Ventures mentioned India faces a substantial problem in competing with Western labs. Though not completely inconceivable, he admits, as an investor, he’s unlikely to make such a guess.
“In the event you have a look at AI in India right now, the market measurement doesn’t fairly justify the extent of R&D funding wanted to make it a hit,” he mentioned.
In addition to, as Mohandas Pai, founding father of Aarin Capital, has advised us, Indian IT hasn’t made any breakthrough within the final decade. IT giants like TCS, Infosys, Wipro, or HCLTech have targeted on offering companies relatively than constructing core tech.
Shouldn’t be the Use Case Capital of the World
This dialog brings us again to Nandan Nilekani, the co-founder of Infosys, who believes India is the use case capital of the world. Even OpenAI CEO Sam Altman just lately acknowledged that India has one in every of its greatest person markets, though Indian merchandise will not be capable of scale globally.
Perplexity AI, constructed by the Indian entrepreneur Aravind Srinivas, was began within the West. Higher progress ecosystem and curiosity from Silicon Valley traders drove him out of India.
On the optimistic facet, there are individuals like CP Gurnani, former CEO of Tech Mahindra, who’s at present constructing AIonOS, an agentic AI startup. Talking at MachineCon 2024, Gurnani mentioned that India ought to transfer past being the use case capital of the world. He believes that an organization like NVIDIA will take form within the nation and be self-sufficient within the chip market.
Equally, Ajai Chowdhry, co-founder of HCL and chairman of Nationwide Quantum Mission, mentioned that the subsequent Apple and NVIDIA should come from India, and he’s after that dream of constructing India as a product nation.
It’d change into attainable given the present push from the federal government, at the least when it comes to AI. IndiaAI Mission, other than deciding on Sarvam for constructing the primary foundational mannequin of India, has additionally chosen 17 corporations to offer infrastructure to allow AI analysis in India, together with Yotta, Tata, and E2E.
This makes it clear that India goals to soar excessive and is headed in that course, however innovation appears missing.
The submit India Has Tech Firms, However Not Sufficient appeared first on Analytics India Journal.