AI Startups To Watch: 5 Indian AI Startups That Caught Our Eye In January

After reshaping the contours of India’s tech ecosystem through 2025, the country’s AI journey has entered 2026 with renewed momentum and sharper intent. 

While innovation has moved at breakneck speed, what stands out is the seriousness with which policymakers are now engaging with AI’s long-term potential, as well as the checks and balances needed to sustain it.

One of the clearest signals came earlier this month, when Prime Minister Narendra Modi held a roundtable with founders, CEOs and senior leaders from India’s emerging AI ecosystem. 

Emphasising AI’s ability to transform healthcare, governance, education and enterprise operations, the PM positioned startups as co-architects of India’s AI-led future. He emphasised that Indian AI must be affordable, inclusive and frugal by design, powered by indigenous datasets, local languages and India-specific use cases.

This comes on the back of a strong year for the ecosystem. Despite a broader funding slowdown, Indian AI startups raised nearly $500 Mn across 63 deals in 2025, breaking into the top 10 sectors by both deal count and capital raised, as per Inc42’s Annual Indian Startup Trends Report, 2025. 

Between 2020 and 2025, Indian-origin AI startups raised over $1.8 Bn, with nearly 80% (around $1.6 Bn) flowing into application-layer ventures.

Instead of framing AI’s momentum only through startup formation and adoption, the capital lens tells an equally compelling story. As per Inc42’s Google X Inc42: Bharat AI Startups Report, 2026, deeptech and AI emerged as the most common theme across new venture fund launches in 2025, reflecting a clear shift in investor conviction.

As of now, much of India’s AI innovation continues to cluster at the application layer. It is these application-first startups, building defensible products for India’s unique needs, that form the focus of Inc42’s fourth edition of AI Startups To Watch. 

From compliance and finance to operations and AI infrastructure, these ventures represent the next wave of India’s AI story. With that said, here is 2026’s first edition of Inc42’s Five AI Startups To Watch.

Editor’s Note: This list is not a ranking. It is a curated snapshot of AI startups that have stood out to the Inc42 editorial team this month.

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169Pi | An AI Model For Tasks Of Any Scale And Complexity 

Despite rapid progress in generative AI worldwide, most mainstream large language models (LLMs) are being built using Western datasets and design choices. These models rely on heavy computing and expensive infrastructure, making them hard to access for many local developers and enterprises.

Moreover, many ready-made models struggle with deep contextual reasoning and long-form tasks. This creates a gap for AI systems that can handle complex reasoning, work with long context windows, and run without the need for costly GPUs.

Reasoning-First Models: Founded in 2024 by former Spheric CEO Rajat Arya, Mumbai-based 169Pi is building an AI ecosystem focussed on reasoning-first models. Its core offering, Alpie Core, is a 32B-parameter model optimised at 4-bit precision to support long context lengths, deep reasoning, and multi-modal workflows.

The Stack: The startup provides a public API, developer Playground, SDKs, and CLI tools, enabling easy integration into research, enterprise, and application environments. Alongside Alpie Core, 169Pi is creating open datasets and developing AI agents for PDF analysis, collaborative workspaces, and domain-specific use cases.

Early Traction And Opportunity: ISRO is one of its early users. 169Pi operates in the AI infrastructure and foundational model space, focussing on efficient, low-cost reasoning models. The global foundational AI market is currently led by players such as OpenAI, Anthropic, Google, and Meta. However, demand for domain-specific, reasoning-focussed models, especially for government, legal and scientific use cases, is growing rapidly.

It is this large language model (LLM) and foundational AI opportunity, expected to grow to $30–35 Bn from $9.4 Bn in 2025, that 169Pi wants to capitalise on.

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Arrowhead | Human-Like AI Calling Agents 

Today, financial institutions depend on large sales and outreach teams that require empathy, compliance awareness and nuanced conversations. But high training costs, attrition and inconsistent performance make traditional call centres difficult to scale. Even routine tasks like insurance renewals or loan conversions often become bottlenecks. 

While enterprises are adopting AI, most solutions still stop at IVR or scripted bots, leaving room for AI that can replicate top-performing human agents at scale.

Founded in 2022 by Devyani Gupta and Vengadanathan Srinivasan, Bengaluru-based Arrowhead builds voice AI agents for BFSI use cases such as sales, collections, renewals and complex customer interactions. Its proprietary orchestration layer enables natural, multi-minute conversations similar to those of skilled human agents.

What Sets It Apart: Arrowhead’s agents integrate with CRMs and backend systems, meet compliance needs and support multiple languages. The startup claims over 80% higher loan conversions, 15% better debt recovery and a 145% increase in insurance conversion likelihood.

The bots operate in Hindi, English, Tamil, Telugu, Malayalam, Kannada and Bengali, with the ability to switch languages mid-call, helping reduce customer drop-offs.

Market And Traction: Arrowhead targets the enterprise conversational AI market, projected at $1.85 Bn. It has grown revenue 4X in recent months and works with over 50 BFSI clients, including Bank of Baroda Cards, Aditya Birla Capital and Paytm.

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Multibagg AI | AI-Powered Equity Research Platform

While millions of new demat accounts open every month, retail investors still struggle to access high-quality equity research. Institutional-grade analysis remains expensive, slow or out of reach for most individuals.

Then, traditional analyst reports and broker research teams are not built to scale for retail users. The lack of affordable, on-demand research often leads to poor decision-making, especially for first-time or time-constrained investors.

Founded in 2023 by Aaditya Aanand, Multibagg AI is a GenAI-powered equity research and analytics platform aimed at bringing institutional-level insights to retail investors.

How The Platform Works: Multibagg AI ingests public market data, filings and financials from NSE- and BSE-listed companies. It uses machine learning and natural language models to generate research insights, thematic analysis and portfolio intelligence. An AI assistant helps users explore stocks, ETFs, IPOs and sector trends.

Early Traction & Market Opportunity: Since its beta launch, the platform has attracted over 10,000 users, processed tens of thousands of queries, and connected portfolios worth more than INR 5,000 Cr.

With India’s retail investor base expanding rapidly post-Covid, demand for scalable research tools is rising. Multibagg AI operates in the Indian financial and predictive analytics market, projected to reach $6.8 Bn by 2033.

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Magicroll AI | Professional-Grade Videos In Minutes

Video content is now the biggest driver of engagement on social media. But producing polished videos remains a time-consuming and expensive process. Small creators, brands and businesses often spend hours manually editing footage by adding B-rolls, captions, effects and transitions.

This problem is sharper for short-form videos, where speed and platform-specific optimisation matter most. Creators need faster ways to turn raw footage into engaging content.

Founded in 2022 by Rana Vivek Singh (CEO), Aayushi Singh (CPO) and Pawan Kumar (COO), Bengaluru-based Magicroll offers an AI-powered video creation and editing platform that converts raw footage into platform-ready videos with minimal effort.

How It works: Magicroll automates key editing tasks such as B-roll generation, intelligent transitions, backdrop replacement and AI-generated captions. The system analyses video content to create engaging narratives automatically. The product is built for talking-head content like podcasts, educational videos and reviews, helping creators and enterprises significantly reduce editing time.

How Does It Earn: Magicroll operates on a freemium model, offering three 60-second videos per month for free. Paid plans start at $25 per month for 20 one-minute videos in 1080p quality. It operates in the fast-growing AI video editing space, competing with players such as Descript, Kapwing, InVideo, RunwayML and Veed.io. The global AI video editing market is expected to reach $12.4 Bn by 2030, growing from $7.5 Bn in 2025.

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NYAI | Reimagining How Legal Teams Work 

Legal work in India remains labour-intensive and error-prone due to complex statutes, layered regulations and frequent judicial updates.

Traditional legal research and compliance tracking take time and money. Most global legal AI products are built for Western legal systems, leaving Indian practitioners without tools that reflect local laws and language diversity.

Founded in 2025 by lawyer Chinmay Bhosale, Pune-based NYAI is building a legal AI and regulatory intelligence platform focussed on Indian statutory law, regulations and compliance workflows.

How The Platform Works: NYAI’s models are trained on millions of legal documents and India-specific datasets. The platform supports legal research, contract analysis, compliance tracking, risk assessment and document creation.

The system provides citation-backed, explainable outputs for enterprise decision-making. It integrates with existing workflows and offers real-time monitoring of regulatory changes, with a strong focus on auditability and traceability.

Market Opportunity: Rising regulatory complexity and multi-jurisdictional requirements are driving demand for tools that reduce manual effort and compliance risk. NYAI competes with players such as CaseMine, VakilSearch and LawRato in the Indian legaltech space. The Indian legal technology market is projected to reach $2.4 Bn by 2030.

[Edited by: Shishir Parasher]