While artificial intelligence startups that have hogged most of the global risk capital haven’t seen the same scale in India, a few like Sarvam AI and Emergent are finding investor interest.
Vibe-coding startup Emergent raised capital from Khosla Ventures and SoftBank in January at a USD 300 million valuation, more than trebling from USD 90 million four months prior.
Sarvam AI, which is developing large language models, is in discussions with various venture capital backers to raise its next funding round at a USD 1.4-1.5 billion valuation, up from its last valuation of USD 150-200 million in 2023. Sarvam, which is fast becoming a flagship player in India’s push for sovereign AI capabilities, is discussing a USD 250-300 million fundraise from global investors including Bessemer Venture Partners, chipmaker Nvidia as well as Indian IT services company HCLTech.
In the fast-growing instant house-help industry, Pronto closed a round from Epiq Capital, General Catalyst and other existing backers at a USD 100 million valuation last month, up from USD 45 million in August last year.
Its rival Snabbit is also excepted to see a twofold jump in valuation within six months of its previous round as it discusses a financing led by South Korean investor Mirae Asset Venture. “Over the past few years, most of the classic growth opportunities have largely played out,” said Kashyap Chanchani, managing director at The Rainmaker Group, a homegrown investment bank.
“Investor focus has shifted more toward exits and secondaries than new entries, as only very few compelling opportunities were visible. In many established sectors, companies have already scaled and even gone public. So in this scenario the big question that emerges is where can investors still find venture-style returns.”
BROADER SLOWDOWN
In the year ended March, overall funding in Indian startups fell 9 per cent to USD 10.1 billion across 977 deals, compared with USD 11.3 billion in FY25 across 1,020 deals, according to Venture Intelligence data.
The decline highlights a broader slowdown in risk capital deployment, as venture investors turn more selective, focusing on emerging themes such as AI and backing differentiated business models with the potential for outsized growth.
“Earlier, growth capital was available at almost every stage. Early on, firms like Peak XV Partners and Nexus Venture Partners would write large cheques,” said a VC investor.
