Indian investors are showing a strong interest in generative AI startups, with funding seeing a massive surge in recent years. As of the first half of 2024, total funding for GenAI startups in India reached $760 million, a significant increase from 2021.
In 2023 alone, AI startups in India raised $91.7 million, compared to $29.6 million in the same period the previous year. So far, Indian generative AI startups have secured over $590 million in private investments, with approximately 70% of the total funding being raised in 2022.
Investor appetite is growing as fund managers pursue companies developing real-world AI use cases. Marquee investors like SoftBank and Antler are actively backing Indian AI startups.
Notably, there’s been a shift in funding, with more capital now directed toward enterprise AI platforms, as opposed to application-based startups, compared to 2023. In the US, over 50% of the funding in the first half of 2024 went to foundation model startups.
Interestingly, Bengaluru stands out as the city with the highest concentration of generative AI startups in India. Furthermore, nearly 84% of Indian CEOs are raising new capital or reallocating budgets to invest in generative AI, a figure that surpasses the global average of 70%.
Here are some Indian investors and accelerators involved in the space.
Titan Capital
Based in India, it was founded in 2015 by Kunal Bahl, who is also the co-founder of Snapdeal. It focuses on providing capital to startups primarily in sectors such as SaaS, and fintech.
The firm typically invests $300,000 to $500,000 initially and has over 300 investments. In 2023, they launched the ‘Winners Fund’ to raise ₹300 crore ($36 million) to support existing companies in later funding rounds. This is its first external capital raise beyond the founders’ personal investments, enabling participation in larger Series A, B, and C rounds.
Currently, they have announced their program called ‘We are Funding’, offering entrepreneurs partners who support them from day one.
IIMA Ventures
Situated at IIM Ahmedabad, IIMA Ventures was founded in 2002. The initiative is backed by the Government of India’s Department of Science and Technology and the Government of Gujarat.
The organisation provides financial support through government grants and investments ranging from ₹10 lakh to ₹15 lakh (approximately $12,000 to $18,000) for ventures, scaling up to $5 million for more developed startups. It has funded over 350 startups and facilitated more than 40 profitable exits.
It recently launched India’s first People and Culture Accelerator program aimed at addressing HR challenges faced by startups.
Blume Ventures
Blume Ventures is a venture capital firm based in India, founded in 2010 by Karthik Reddy and Sanjay Nath. The firm primarily focuses on seed and pre-Series A investments in technology-led startups across various sectors.
Having raised four funds to date, with the latest, Fund IV, closing at over $250 million in 2022. This brings the firm’s total assets under AUM to over $600 million. The funds are designed to back startups that help challenges within India or utilise Indian innovation for global markets.
It has successfully backed over 60 startups in its first fund alone.
Kalaari Capital
Kalaari Capital was founded in 2006 by Vani Kola. Initially, it began with a focus on investments in Indian startups. They mostly focus on startups in India and have been recognised for generating substantial returns for its investors and limited partners reportedly earning over $600 million from successful exits in 2021 alone.
Located in Bengaluru, it actively participates in the Indian startup ecosystem by investing in approximately 10-12 startups each year. The firm typically invests between $1 million to $10 million per startup, depending on the stage and potential of the company.
NASSCOM
Founded in 1988, it was established by a group of entrepreneurs, including NR Narayana Murthy, K Dinesh, and SD Shroff, among others. The organisation was created to support and promote the growth of the Indian IT and BPO industry.
Boasting over 3,000-member companies, including leading Indian IT firms and multinational corporations, the organisation has played a vital role during crises, such as managing reputational challenges following the Satyam scandal in 2009.
Additionally, it launched a program in 2013 to promote 10,000 startups in India by 2023, further emphasising its commitment to fostering entrepreneurship.
T-Hub
Established in 2015, the world’s largest innovation campus is a collaboration between the Government of Telangana, IIT Hyderabad, ISB, NALSAR, and industry partners like Tech Mahindra and Cyient.
Located in Hyderabad, T-Hub is a vibrant ecosystem that nurtures innovation and entrepreneurship. It can accommodate around 1,000 startups, has a data centre, and Centers of Excellence from firms like Apollo Tyres, NPCI, and more. It has partnered with DST to establish the MATH and NITI Aayog to set up the AIC.
Since its inception, the firm has nurtured over 2,000 startups through various initiatives, collaborating with over 80 angel investors and VCs to help secure nearly $2 billion in funding.
Indian Angel Network
Founded in 2006, IAN has been actively investing in startups and providing funding and mentorship to early-stage companies, helping them scale their operations and refine their products.
It invests $100,000 to $1 million in startups, averaging around $400,000 to $600,000 per investment. The network aims to exit investments within three to five years through strategic sales or other means. Sector-agnostic, it has funded startups across 19 sectors in India and seven other countries, expanding the global footprint of its companies.
Axilor Ventures
Being an early-stage venture capital firm based in Bangalore, it was founded in 2014 by Ganapathy Venugopal, SD Shibulal, Senapathy Gopalakrishnan, Srinath Batni, and Tarun Khanna.
It typically invests in seed and startups, with round sizes ranging from $1 million to $5 million. The firm aims to be one of the top three investors in a startup’s initial rounds, participating alongside other investors such as Binny Bansal, Sachin Bansal, and Pi Ventures. With around seven to 12 investments per year, it has a higher-than-average exit rate compared to other venture capital firms.
In 2022, Axilor announced the launch of its second fund with a corpus of $100 million (₹770 crore), building on the success of its first ₹200 crore fund.
India Accelerator
Founded in 2017 by Ashish Bhatia, it is a startup accelerator based in India that supports startups focusing on generative AI, especially in sectors like content creation, automated workflows, and data generation.
It invests up to $500,000 in seed capital through its SEBI-registered AIFs for startups that are part of its accelerator program and typically takes an equity stake of 5-15% in the startups it invests in.
The accelerator has supported over 100 startups since its inception, with several of them going on to raise follow-on funding from prominent investors.
Pi Ventures
Manish Singhal is the founder of Pi Ventures and is dedicated to startups working on investment in technology-driven startups, particularly those working on AI and machine learning solutions. They offer mentorship, capital, and connections to a global network of investors.
Fund I was launched with a corpus of $30 million and has funded 15 companies and Fund II, launched in 2023 with a corpus of $85 million.
The firm also backs businesses that offer significant differentiation, aiming to create value in both new and crowded markets. Its focus on “10x solutions” addresses large global problems through innovative technologies.
Accel Ventures
Global venture capital firm Accel announced the launch of Accel Atoms 4.0, the fourth edition of its pre-seed scaling programme, that offers chosen startups up to USD 1 million funding along with the perks of over USD 5 million from their partners. Building on the success of three prior editions, this initiative aims to facilitate a smooth journey for visionary AI founders and entrepreneurs in Bharat, according to the VC firm.
Accel Atoms 4.0 is inviting applications from two categories of pre-seed startups: those focused on ‘Bharat’ and AI. AI-focused startups will receive mentorship in AI applications.
According to Prayank Swaroop, Accel partner and leader of the AI cohort, the program aims to support Indian-origin founders globally, focusing on AI solutions ranging from small language models to LLM-powered systems.
JioGenNext
A startup accelerator program initiated by Reliance Industries Limited and is sponsored by them. They actively engage with technology start-ups through the JioGenNext MAP to help them scale up.
Established nearly a decade ago, their partnership with MeitY Startup Hub, provides access to RIL/Jio mentors, industry experts, and investors; with notable startups.
Since its inception, they have conducted 18 startup mentorship programs, received over 13,670 applications, and mentored 177 startups, helping them raise around USD 545 million in early-stage venture capital. In total, they have supported 185 startups, with many alumni achieving significant funding milestones and acquisitions.
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