India’s Generative AI (GenAI) startup ecosystem has seen massive expansion, according to Nasscom’s latest report titled ‘India’s Generative AI Startup Landscape 2024’.
The report, which is based on information from more than 110 interviews with startups and a study of more than 240 active GenAI startups, describes the rise and development of the industry over the past 18 months.
Exponential growth of GenAI startups
The report highlights that the number of GenAI Startups in India increased by 260%, rising from more than 66 in the first half of 2023 to more than 240 in the same period in 2024.
This expansion is attributed to the increase in innovative product launches and the rapid deployment of generative AI models, with 17 native ones. GenAI The linguistic models that emerged during this period.
Nasscom’s findings indicate that nearly 80% of startups added last year are focused on GenAI assistants, showing a shift in industry offerings.
Funding and revenue growth
Despite being in the early stages, India’s GenAI new companies They have managed to attract significant investments, with accumulated financing that exceeds 750 million dollars from 2023.
The report also notes a dramatic increase in new revenue-generating businesses, rising from 22% in the first half of 2023 to 75% in the same period of 2024.
This growth in revenue generation capabilities indicates the growing maturity and commercial viability of India’s GenAI ecosystem.
Key expansion areas
GenAI Indian startups are diversifying their focus across three major segments: infrastructure, applications and services. Among them, productivity-enhancing applications such as coding plugins and workflow automation tools have seen a notable doubling of their funding, with 45 startups currently operating in this space.
Additionally, the number of startups offering GenAI assistants has quadrupled, with many moving from traditional AI chatbots to more sophisticated virtual assistants powered by GenAI.
In the services segment, key models such as GenAI-as-a-service and data-as-a-service are emerging, although funding remains concentrated in a few notable startups.
Emerging centers and extension at the national level
While Bengaluru remains the leading hub for GenAI startups, hosting 43% of all such startups in India, other cities are fast becoming important players in the ecosystem.
Cities like Ahmedabad, Lucknow, Surat and Kolkata now account for 18% of India’s GenAI startup ecosystem, showing a national spread of innovation beyond traditional tech hubs.
The report notes that there is little difference in technological approaches or business models between these emerging hubs and established hubs like Bengaluru, indicating a cohesive and expanding network across the country.
Challenges of GenAI startups
Despite the impressive growth, the Nasscom report identifies several challenges facing the GenAI startup landscape in India. These include a lack of patient capital, limited computing resources that impact scalability beyond the proof-of-concept stages, customer hesitancy, and a shortage of trained AI professionals.
Additionally, regulatory concerns and trust issues remain major obstacles for startups looking to scale their solutions.
Sangeeta Gupta, Senior Vice President and Chief Strategy Officer, Nasscom, highlighted the importance of collaborative efforts to overcome these challenges.
“Achieving this progress requires a collective effort focused on rapid co-innovation within an enriching ecosystem. “We must prioritize funding high-potential GenAI startups and focus on attracting and developing top-tier AI talent,” he said.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.