India strengthens GenAI startup market, funding up over threefold: NASSCOM
- IBEF
- November 26, 2024
India has made significant strides in the global generative artificial intelligence (GenAI) sector, ranking sixth among major economies in the share of GenAI startup ecosystems. According to a report by NASSCOM, India’s GenAI funding saw a sixfold increase in Q2 FY25, rising from US$ 8 million (Rs. 67 crore) in Q1 FY25 to US$ 51 million (Rs. 430 crore). The surge in funding activity was marked by a record 20 rounds of investment, driven by enterprise applications and Agentic AI, with total funding growing 3.4 times YoY. Notably, over 90% of the funding in Q2 FY25 was concentrated in three startups: Nurix AI, Dashtoon, and Mihup. Early-stage investments, including angel and seed funding, represented 77% of the rounds. However, the size of funding rounds remained modest, with seed rounds below US$ 12.5 million (Rs. 105 crore) and Series A funding under US$ 15 million (Rs. 126 crore).
The report highlights a shift in India’s GenAI space, with a growing focus on impactful applications that enhance productivity. Technology providers increasingly prioritize converting active proofs of concept (PoCs) into production-ready solutions, reflected in a 25% rise in partnership activity in Q2 FY25. Noteworthy collaborations include Accenture and Unilever, Genpact, and Volkswagen Financial Services. The GenAI revenue pipeline for IT services providers is also strengthening, with Accenture reporting US$ 3 billion (Rs. 25,284 crore) in bookings and TCS posting US$ 1.5 billion (Rs. 12,642 crore). Senior Vice President and Chief Strategy Officer at NASSCOM, Ms. Sangeeta Gupta, emphasised that future success in this evolving landscape will depend on strategic innovations and successful pilot project outcomes.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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