India To Have 900 Mn+ Active Internet Users By 2025
By 2025, 56% of all new internet users will be from rural areas, and 65% of new internet users will be female
users Internet Penetration (Active Users) 71% Urban Internet Penetration (Active Users) $0.17 Cost Of 1GB
7K+ 5G Enabled Indian Cities/towns
SOURCE: IAMAI, INC42 ANALYSIS
The State Of Indian Startup Economy
3rd Largest Ecosystem In The World
768K+ Jobs Created In The Past Six Years
68K+ Indian Startups Launched To Date
$143 Bn+ Funding Raised By Indian Startups
111 Indian Startups In The Unicorn Club
5.3K+ Funded Startups In India
9.5K+ Investors Participated In Startup Funding
$500 Bn+ Combined Valuation Of Indian Startups
1.2K+ M&A Deals Recorded
Source: Inc42
Note: Funding data is for the period between 2014 and June 2023
24 Listed Indian Internet Companies
Artificial Intelligence: At The Centre Stage Of World’s Fifth Industrial Revolution
Machinery, Water power, Steam power
Mass production, Assembly line, Electricity Computer and Automation
Internet and cyber-physical systems
Human-cyberphysical systems (HCPS)
Source: A research paper by Xiao Chen (Technical University of Denmark), Inc42 Analysis
The fifth industrial revolution will be impacted by techs like artificial intelligence, quantum computing, and Web3.
What Is Generative AI
Difference Between Generative AI & Predictive AI What Is GenAI?
GenAI is a form of artificial intelligence designed to create new content by learning from existing data. Leveraging advanced algorithms, it produces unique outcomes that mimic human creativity.
What Is Predictive AI?
Predictive AI is engineered to forecast outcomes based on the analysis of historical data and existing information. These systems employ machine learning algorithms to identify trends and statistical patterns within large sets of data.
Features
Creates new content
Analyses data
Uses machine learning
Simulated results
Ideal Use Case
Automated Content Generation In Text, Image And Video For Areas
Such As — Marketing, Production, Music, Among Others
Market Forecasting, Data Analytics, Consumer Intelligence
Generative AI Vs Predictive AI: What Sets Them Apart
Learns relationship between
Learns patterns on unstructured content Unstructured Content
Source: Google’s Introduction to Generative AI
How Generative AI Works
Training code
Generate new content
Foundation Model Text Generation
Generate new content
Code Generation
Labelled data
Generate new content
Image Generation
Unlabelled data
Source: Google’s Introduction to Generative AI
The Generative AI Application Landscape
Generative Artificial Intelligence (GenAI) Innovation Timeline
Spam detection
Translation
Basic Q&A
Basic Copy writing
First drafts
Multi-line generation 1- line auto- complete
Longer form
Second drats
Public Launch of ChatGPT 3 (Nov 2022)
Source: Sequoia Capital
Vertical fine tuning gets good ( scientific papers,etc)
Final drafts better than the humon average
Final drafts better than professional writers
Longer form
Better accuracy
More Languages More Verticals
Text to product (draft)
Art Logos
Photography
Mock-ups ( product design, architecture, etc.)
First attempts at 3D/ Video models
Basic / first draft videos and 3D files
Final drafts (product design, architecture, etc.)
Text to product (final) better than full-time developers
Final drafts better than professional artists, designers, Photographers
AI Robolox
Second drafts
Large model availability:
First attempts Almost there
Video games and movies are personalised dreams
Ready to prime time
Key Statistics From Generative AI Startup Ecosystem In
India
India’s GenAI Startup Landscape
Source:
India’s GenAI Startup Landscape: Native Vs Adopters
Source: Inc42
Note:
GenAI Natives:
Startups that began their business operations offering products or services anchored in transformer LLM models.
GenAI Adopters: Startups that initially launched without leveraging transformer-based LLM models in their products or services, but later integrated this technology into their core or supplementary offerings.
GenAI Natives
GenAI Adopters
Segment Wise Distribution: GenAI Startups In India
Between 2019 and September 2023, Indian generative AI startups secured over $440 Mn in funding Application Layer (Segment) Code & Data
Code Generation, Text To Sql, Insight Generation, Web/App Development
Audio & Video
Voice Synthesis, Text To Video, Audio/Video Editing
Image Generation & 3D Modelling
Image Generation, Editing, Digital Marketing Creatives, 3D Modelling Text & Chatbots
Source: Inc42
Note: We have only included native GenAI
Note Making, Email Writing, General Writing, Customer Support Total Active Startups Total Capital Raised Notable Startups Use Case
One In Three Indian GenAI Startups Target The
Code And Data Segment
The Code & Data aspect of GenAI encompasses features such as generating code, crafting documentation, and converting text to SQL.
A range of modern SaaS startups, from digital marketing to app development and big data, are looking to leverage GenAI to enhance user experience and streamline operations.
Source: Inc42
& Video
& Chatbots
Mapping The States: The Geographic Spread Of India's GenAI Startups
Karnataka hosts 44% of India's generative AI startups
Indian States
Source: Inc42 Note:
88% Of India's GenAI Startups Are In Early Stage
Source: Inc42 Note:
Investors Backing GenAI Startups In India
Number Of Startups Backed Notable Funded Startups
Floworks, Garvik AI, Orbo
Spyne, Scalenut
Source: Inc42
Kroop AI, Metabrix, Vitra.ai, Vodex
DhiWise, Spyne, dubdub.ai
Hexo AI
NeuroPixel.AI, REZO
DhiWise, hyperagro.ai
Number Of Startups Backed
Notable Funded Startups
Aspiro, Beatoven.ai, NeuroPixel.AI, syncsense
Source: Inc42
Pixis, Unsqript, Visualdub
DentalDost, Expertia AI, LimeChat
hypergro.ai, NeuroPixel.AI
Dubverse, Zocket
Observe.AI, WorkHack
Alltius, kombai.com, Unscript
Contlo, Scalenut
Observe.AI, Baselit, Play.ht
Note: This is not an exhaustive list | We have only included native GenAI startups for this analysis | Funding data is for the period between 2019 and Q3 2023 | Only publicly disclosed deals have been considered for this analysis
A List Of Generative AI Startups In India
Company Name Segment
Code & Data
Code & Data
Code & Data
Text & Chatbots
Image Generation & Editing
Audio & Video
Text & Chatbots
Image Generation & Editing
Code & Data Text & Chatbots
Source: Inc42, Secondary Sources
Note: This is not an exhaustive list nor a ranking of any kind | We have only included native GenAI startups in this list
Chiratae Ventures, Endiya Partners, Google, Entrepreneur First
SenseAI Ventures, Y Combinator, Entrepreneur First, AWS
Chiratae Ventures, AWS, MassChallenge, FortyTwo VC
Antler India
Dholakia Ventures, Huddle, TDV Partners, Silverneedle Ventures
Inflection Point Ventures
Capital, Stellaris Venture Partners Stellaris Venture Partners, Google, IFC, Pi Ventures
Source: Inc42, Secondary Sources
& Data
& Video
& Chatbots
& Editing
& Chatbots
& Data
& Chatbots
Note: This is not an exhaustive list nor a ranking of any kind | We have only included native GenAI startups in this list
Matrix Partners, Elevation Capital
Inflection Point Ventures, Entrepreneur First, Huddle, Flipkart Ventures, Dexter Angels
Zoom, Bossanova Investimentos, Y Combinator, Menlo Ventures
Venture Catalysts, YourNest Venture Capital, AWS, Founders Factory, GenNext Ventures
General Atlantic, Celesta Capital, Chiratae Ventures, SoftBank Vision Fund
Techstars, Silver Lake, 8VC, Red Ventures, AV8 Ventures
Indvest Ventures, Dexter Angels, Modulor Capital
Titan Capital, Saama Capital, AngelList India, Amit Singhal, First Principles
All In Capital, Paradigm Shift Capital, WEH Ventures, 100x Entreprenuer
Tenity, Fractal Analytics
& Data Audio & Video
&
& Video Text & Chatbots Audio & Video
& Data
& Data
& Data
Generation & Editing
Source: Inc42, Secondary Sources
Note: This is not an exhaustive list nor a ranking of any kind | We have only included native GenAI startups in this list If you are an Indian GenAI startup and want to be included in our coverage. Please reach out to us at editor@inc42.com
Accel, AngelList India, Storm Ventures, Abhishek Deo, Pentathlon Ventures
Peak XV Partners, Trajectory Ventures, Eniac Ventures
Stellaris Venture Partners, Ghazal Alagh, Exfinity Venture Partners, Entreprenuer First
Exfinity Venture Partners, RAAY Global Investments
100X.VC, Inflexor, 2AM VC
100X.VC
Alpha Wave Global, CIIE.CO, Artha Group, Bharat Innovation Fund, Target Accelerator
Untapped Capital, Pack Ventures, SeaChange, Array Ventures, Upsparks
Nexus Venture Partners, Together Fund
Kalaari Capital, Kettleborough VC, Jasminder Gulati
Generative AI Market Opportunity:
India & The World
Key Statistics From The Global Generative AI Market
$4.4 Tn+
GenAI’s Global Economic Impact
GenAI Startups In The World
Marketing And Advertising
Top Sector Using GenAI in 2023
Bn+ GenAI’ Global Market Size By 2030
$897 Bn+
Estimated Revenue Generation By GenAI Players By 2030
Source: Mckinsey, Bloomberg, Other Secondary Sources
Share Of GenAI Products And Services In Corporate IT Spend By 2030
Generative Artificial Intelligence (GenAI) Value Chain
Hardware & Cloud Platforms
Foundation Model
Model Development & Fine Tuning
Application Layer (Text/Image/Code/Audio & Video)
Source: Inc42 Note:
Computer hardware/ infrastructure providers such as — CPU, GPU, CSP etc.
Developers of API and foundation GenAI models on which applications are built
Tools and software used in development and fine tuning LLM models and DBs
Infrastructure Layer
Global GenAI Market Size To Cross $550 Bn+
By 2030
The overall market size (revenue generation) is estimated to grow at a CAGR of 40% between 2023 and 2030
Source: Bloomberg Intelligence, Inc42 Analysis
Key Business Domains Where GenAI Can Deliver Significant
Approximately 75% of the total value generated by adopting GenAI in business operations is expected to originate from these domains. Source: Mckinsey, Inc42
Generative Al: Opportunities In Al Tooling
Opportunity
LLM fine-tuning services
Model-optimization services
Custom Al model development
Al model management & monitoring
Al Produced TDaaS (Training Data as a Service)
Al-powered data labeling
LLMaaS (LLM as a Service) platform
Al education and training
Al-powered process automation
Al model security & compliance
Al model consulting
Source: All in Capital
Description
Fine-tune pre-trained LLMs for domain-specific language and industry applications.
Optimize Al models to reduce training, storage, and deployment costs.
Design and train Al models for specific business use-cases and applications.
Manage and monitor Al models with version control, performance tracking, and bias detection.
Massive amount of training data is needed for LLMs and Al models - this data may be generated by existing Al models as a TDaaS product.
Provide high-quality pre-processed and labeled data using Al for training Al models.
Offer subscription-based access to LLMs, tools, and technologies.
Train and educate businesses on leveraging Altechnologies for their operations.
Develop Al-driven solutions for automating routine tasks and processes.
Ensure Al models are secure and compliant with industry regulations and ethical guidelines.
Guide businesses on strategizing and identifying impactful Al implementation use-cases.
India's Generative AI Market To Surpass $17 Bn By 2030
India's share in the global GenAI market is expected to increase from 2% in 2023 to 3% in 2030.
Source: Inc42 Analysis, Gartner
Note:
Sectors Where GenAI Will Have The Most Impact In India
Sector GenAI Use Case
Marketing & Advertising
Ecommerce/Retail
Education
Finance
Healthcare
Media & Entertainment
SaaS & Software Development
Source: Inc42, multiple secondary sources
Ad Copy Text Generation, Branding Creatives, Email Marketing, Customer Targeting/Personalisation, Custom Client Campaign Report Generation, No-Code Website/App Development
Customer Support, Customer Targeting/Personalisation, No-Code Website/App Development, Product Image/ Video Generation, Marketing And Advertising
AI Tutor, Customised Learning Materials, Automated Assignment Review, Automated Note Making, Customer Support, Marketing And Sales, No-Code Website/App Development
Personalised Invested Recommendation, Customer Support, Marketing And Advertising, Marketing And Sales, Custom Market Performance Report Generation, No-Code Website/App Development
Drug Discovery/ R&D, Customer Support, Lab Test Report Generation, Marketing And Advertising, No-Code Website/App Development, Personalised Health Recommendation Based On Patients Medical History.
Text Content Generation/Editing, Image Generation/Editing, Video Generation/Editing, Ai News Anchors, No-Code Website/App Development, Customer Support, Marketing And Advertising
Software Product/Application Testing, No-Code 3rd Party Integration, No-Code Website/App Development, Customer Support, Marketing And Sales, Custom Client Report Generation
Note: The sectors and GenAI use cases highlighted in this report are not exhaustive but have been selectively chosen based on the significance indicated during our research
Five Key Growth Drivers Of GenAI In India
Digitalisation & Cloud Computing:
With more than 759 Mn active internet users, India ranks as the world's second-largest internet user base. Cloud computing in India is estimated to account for 8% of India’s GDP by 2026, with a potential to add $310 Bn to $380 Bn to the country’s GDP.
Demand For Creative Content:
India's significant consumer base for tech giants like Google, Meta, and Snapchat creates a lucrative marketplace for digital marketing, leading to increased demand for digital creatives today and in the future.
Access To Structured Data:
The internet has produced enormous volumes of user and business data worldwide, totalling 329 Mn terabytes (TB) each day. Enhanced access to organised data will significantly enhance AI adoption in the nation, resulting in heightened output accuracy.
New Developments In AI Models:
Just as the 2017 breakthrough in transformer ML models by Google scientists paved the way for the development of today's popular Generative AI models like ChatGPT and BARD, future innovations in this technology have the potential to broaden its applications across various domains and industries.
Workflow Automation:
As India aims for a $5 Tn economy by 2030, automation in business operations will play a key role. The adoption of Chatbots in leading Indian startups and corporations has already disrupted customer support roles, and this trend is likely to continue and expand in areas such as digital marketing, sales, software development and client servicing.
Five Critical Hurdles Facing India's GenAI Ecosystem
Lack Of Startups In GenAI Foundation Models:
Among the 50+ Indian GenAI startups we identified for this report, all focus on the application layer, primarily developing apps using models like ChatGPT, with none involved in creating GenAI foundation models.
High Expense Of GenAI Model Training:
The hardware and infrastructure costs for training large language models are prohibitively high, as exemplified by the need for 285K CPUs and 10K Nvidia GPUs to train GPT-3.
Issues Of Bias and Inaccuracy:
Biases inherent in the data can be passed on to models trained on large datasets. A major challenge lies in ensuring the fairness and reduction of bias in the content generated.
Legal And Regulatory Challenges:
In recent years, the Indian government has been regulating emerging tech sectors like fintech, social media, and online pharmacies. Regulations concerning intellectual property, privacy, and content generation rights are likely to be enacted.
Concerns Over Deepfake And Misinformation:
Deepfakes, which are convincingly realistic forgeries generated by models, present ethical issues related to misinformation, privacy, and potential malevolent uses.
www.inc42.com
Inc42 is India’s largest tech media & information platform on a mission to build & serve India’s tech, startup & internet economy. From breaking the latest news to discovering the hottest startups, from spotting upcoming trends to simplifying complex concepts, we cover everything tech in India’s internet economy.
Born in January 2015, Inc42 has become the leading source for news & analysis on India’s rapidly growing tech, startup & internet economy. Inc42, with over 35,000+ published stories, 80+ research reports, 120+ conferences & events & having featured 1000s of entrepreneurs, now reaches over 25 Mn+ tech leaders & professionals every month.
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