Kanpur Investment：Seed stage funding on the rise for AI-based startups

Artificial intelligence-based startups across sectors such as healthcare, logistics, energy, fashion and others are seeing a growth in pre-seed and seed-stage funding.

According to data sourced from Tracxn, AI-based in the above sectors have already raised $6.7 million as seed and pre-seed funding in just two investment roundsKanpur Investment. This marks a significant increase from the $8.6 million raised by such firms across 10 rounds in 2023.Kanpur Stock

The data further showed that so far in 2024, AI-related startups in total have raised $13.7 million in three rounds against $1.2 billion across rounds and categories this year. The AI-based startups raised $11.7 million in the quarter ended March across two rounds, a whopping 1,362% sequential increase from $0.8 million bagged in two rounds during October-December.

“We’re basically seeing seed funding and pre-seed funding inclination towards companies that offer AI as service as people are now looking for a technological intervention in almost all aspects of their lives,” Yagnesh Sanghrajka, founder and chief financial officer of 100X.VC said.

Incidentally, the top three deals made in 2024 were to AI-based startupsAgra Investment. Attentive AI, a company that provides software as a service (SaaS) and AI-based mapping products for delivering actionable insights to businesses, bagged $7 million in its Series A round led by Vertex Ventures.

Further, RagaAI and vodex.ai raised $4.7 million and $2 million, respectively, in their seed rounds led by pi Ventures and Unicorn Ventures.

“This investment is a testament to the immense potential of generative AI in revolutionising sales,” Anshul Shrivastava, chief executive officer of Vodex had saidAgra Stock. “Vodex will invest in building a dedicated and highly trained support team to ensure exceptional customer service,” he added.

NEW INVESTORS FOR NEW TECH

As AI innovations flourish and the demand for cutting-edge products surges, a new asset-class investors are emerging with bigger cheques. Even established corporations are reallocating their investments or are considering to invest or collaborate with these AI-based startups.

“We are seeing a few trends in , traditional VCs are obviously there, but even micro VCs are coming in with seed cheques and we are also seeing investors from HNI (high net-worth individual) and the family offices, who are aggressively investing with larger cheques,” said Sanghrajka. He also said that a few corporate companies are stepping up their investments.

Recently, Panasonic Solutions India, in partnership with 100X.VC, selected 12 startups for its Panasonic Ignition Corporate Accelerator programme.

The two Ignition programme winners — Enlite and Clairco — can receive corporate venture capital funding anywhere in the range of $0.5-$1.5 million in the next two-six months and get business collaboration opportunities, Manish Misra, chief innovative officer of Panasonic Life Solutions India told FE. Enlite and Clairco focus on AI-enabled wireless building management systems and develop IoT-based smart air purification devices and space optimisation solutions.

According to Tracxn, the list of top investors in Indian startups features a wide array of entities from established venture capital firms to emerging angel investors, with varying investments.

Leading the pack in the year 2023 and so far in 2024 is pi Ventures, a prominent venture capital firm focused on investing in early-stage deep tech startups, with a portfolio count of three rounds of investment in three startups.

Further, Pentathlon Ventures and Peak XV Partners are among the investors that have made significant contributions. Other notable investors include Exfinity Venture Partners, Endiya Partners, and We Founder Circle.

Going forward, in the next three to four quarters as the develops more, experts believe that AI-based startups will get bigger cheques, outpacing the investments made in non-AI-related companies.

“The investments start at a lower level with smaller cheques, especially with generative AI still kind of emerging. So, by the time companies get outcomes, it typically takes a year, so that’s when all the cheques will probably start coming in. That is what even the early trend is showing,” he said.

Lucknow Wealth Management