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Become A Startup Insider With Inc42 Plus
Join our exclusive community of business leaders &makers for in-depth tech stories and intelligence on India’s tech economy you won’t find elsewhere.
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Become A Startup Insider
Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.
In today’s fast-paced AI/ML landscape, early stage investors meticulously follow all relevant developments that can redefine business models and improve efficiencies. The use of AI/ML for business excellence has always been a hot topic. But the GenAI boom in the past two years has carved the path for startups looking to use this technology genre.
Although the overall funding scenario remains subdued, venture capital (VC) firms are doubling down on AI investments all over the globe. A Goldman Sachs report published last year forecast that businesses may invest around $200 Bn globally by 2025 to accrue the full benefits of GenAI, while private funding at a global level may rise to $158.4 Bn by that time.
According to a NASSCOM-BCG report, India’s AI market is estimated to reach $17 Bn by 2027, growing at an annualised rate of 25-35% between 2024 and 2027. Most of this growth will be driven by the rise in enterprise tech spending on AI tools and talent and an increase in AI investments.
In addition, there shall be emphasis on AI-driven consumer services. Ecommerce startups using AI to personalise shopping and automate customer support have primarily gained here, raising $561 Mn in 102 deals during the first six months of 2024, according to a report by Inc42.This trend is in line with widespread online shopping and the need for smart tech to boost businesses.
To explore things further, Inc42 and Oracle recently organised a virtual panel discussion on VCs Bet Big On AI To Drive The Next Wave Of Startup Success. It was part of an ongoing series titled Boardroom: Powering Data With AI.
Moderated by Ankur Dubey, principal at Capria Ventures, the session brought together leading investors and partners from the industry, including:
- Arjun Rao, partner at Speciale Invest
- Girish Shivani, executive director & fund manager, YourNest Venture Capital
- Rajiv Mehta, MD & general partner, Athera Venture Partners
- Vikram Ramasubramanian, partner at Inflection Point Ventures
- Anagh Prasad, investor at Accel
- Sahil Makkar, VP at IndiaQuotient
- Saravanan Palanivel, VP (cloud engineering), Oracle India
How Startups Can Corner Success In An AI-First Ecosystem
The rapid advance of AI-GenAI applications and cloud-based AI platforms, software and services are driving AI implementations at scale. The all-new tech ecosystem has also transformed communications, not just between humans and machines (although chatbots/AI agents are becoming conversational wizards day by day) but between machine and machine to optimise data flow and automate routine-to-complex tasks.
AI is accelerating time-to-market for products and services, reducing costs and improving end-user experience to bring a better return on investment (RoI).
“In my opinion, we have to reimagine these experiences [of product building] from the ground up,” said Arjun Rao of Speciale Invest.
“Startups are often asked whether they are building AI-native products as opposed to embedded AI. In the first case, they build products from scratch with AI at the core. It requires imagining interfaces and making things much more seamless. Then you can possibly deliver 10x value. These are specialised developments instead of embedding, which is adding GenAI layers on top of existing workflows
,” he added.
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Rajiv Mehta of Athera Venture Partners (formerly Inventus India) emphasised the importance of strategic focus and agile monitoring.
“Given how fast [technological] disruptions are happening, you should be acutely aware of what the market demands and must focus on those priorities. I would say speed is critical here. The way things are moving, you must try and stay ahead of the curve.”
Another critical factor is competitive vigilance.
“Make sure you are watching what your competitors are doing. Sift through the data and catch the signal, discarding the noises. There is always a fine line between what you can build and what needs to be built,” he said.
Speaking about target investment areas and growth opportunities, Anagh Prasad of Accel said, “We have made substantial investments in enterprise automation. We are now pursuing verticalised assistance for services outsourced to India.”
The panel also explored opportunities around quantum computing and algorithms, AI DevOps and autonomous databases, as these innovations are set to shape the future of startups and legacy players alike.
