Key Takeaways

• As of 2020, India has become a prominent center for AI innovation and entrepreneurial ventures, boasting more than 1,600 startups in the field of artificial intelligence.

• Factors driving the growth of AI startups in India include a large talent pool, abundant data availability, government support, and a vibrant startup ecosystem.

• Some of the top AI startups in India include Manthan, SigTuple, and Nextbillion AI, which are creating innovative solutions in retail analytics, healthcare diagnostics, and mapping.

• Despite challenges such as lack of quality data, infrastructure, awareness, and talent, AI startups in India have significant opportunities in a large and diverse market, government support, and a culture of innovation and collaboration.

The Rise of AI Startups in India’s Tech World

Artificial Intelligence (AI) represents a technological breakthrough, enabling machines to imitate human cognitive functions & perform activities usually requiring human effort. AI holds the promise of revolutionizing numerous fields, including healthcare, education, agriculture, manufacturing, and retail. Moreover, AI offers solutions to some of India’s most pressing issues, like poverty, environmental pollution, traffic congestion, and security concerns.

In recent years, India has emerged as a hub for AI innovation and entrepreneurship, with many startups adopting AI to develop cutting-edge solutions for various problems and opportunities. According to a report by Nasscom, India ranked third in the world in terms of the number of AI startups, with over 1,600 AI startups as of 2020. These startups have raised over $2.5 billion in funding from various investors, both domestic and international.

In this blog, we will explore some of the factors that have contributed to the rise of AI startups in India’s tech world, and highlight some of the most promising and successful AI startups that are leading the AI race in India.

Factors Driving the Growth of AI Startups in India

There are several factors that have enabled India to become a fertile ground for AI innovation and entrepreneurship. Some of these factors are:

• Talent pool: India has a large and young population, with over 1.3 billion people, of which more than 50% are below the age of 25. India also has a strong educational system, with over 10,000 engineering colleges and over 1.5 million engineering graduates every year. Numerous graduates possess the necessary skills and expertise to venture into careers in AI and its associated domains, like data science, machine learning, computer vision, and natural language processing. Moreover, India is home to a significant number of seasoned professionals who have gained experience in international IT firms, equipping them with familiarity with cutting-edge technologies and top-tier practices in the field of AI.
• Data availability: Data is the fuel for AI, and India has an abundance of data, both structured and unstructured, that can be used to train and test AI models. India has the second-largest internet user base in the world, with over 700 million internet users as of 2020. India also has the largest number of smartphone users in the world, with over 500 million smartphone users as of 2020. These users generate a huge amount of data every day, such as text, images, videos, audio, location, etc. India also has a large number of government and private databases, such as Aadhaar, UPI, GST, etc., that contain valuable information about the citizens and the economy. These data sources can provide insights and opportunities for AI startups to create solutions that cater to the needs and preferences of the market.
• Government support: The Indian government has recognized the importance and potential of AI for the country’s development and growth, and has taken several initiatives to promote and support AI innovation and entrepreneurship. Some of these initiatives are:
  • National Strategy for Artificial Intelligence: In 2018, the NITI Aayog, the policy think tank of the Indian government, released a report titled “National Strategy for Artificial Intelligence”, which outlined the vision, goals, and roadmap for AI development and adoption in India. The report identified five focus areas for AI intervention, namely healthcare, agriculture, education, smart cities, and smart mobility and transportation. The report also proposed the creation of a National AI Marketplace, a platform to facilitate the sharing of data, models, and resources among various stakeholders in the AI ecosystem.
  • National AI Portal: In 2020, the Ministry of Electronics and Information Technology (MeitY) launched the National AI Portal, a one-stop platform for all AI-related resources and activities in India. The portal aims to provide access to AI tools, datasets, publications, courses, events, news, and opportunities for AI enthusiasts, researchers, students, startups, and industry. The portal also showcases the AI initiatives and achievements of various government departments, academic institutions, and private organizations in India.
  • AI for All: In 2021, the Ministry of Electronics and Information Technology (MeitY) and the NASSCOM launched the AI for All initiative, a program to create awareness & educate the masses about AI in India. The program offers a free online course on the basics of AI, covering topics such as AI applications, AI ethics, AI careers, etc. The program also provides access to various AI platforms, such as CoE AI, AI Classroom Series, AI Game Changers, etc., that offer advanced learning and mentoring opportunities for AI aspirants and enthusiasts.

Startup ecosystem: India has a vibrant & dynamic startup ecosystem, with over 55,000 startups as of 2020, of which over 34% are in the tech sector. India also has over 40 unicorns, i.e., startups with a valuation of above $1 billion, of which over 10 are in the tech sector. India also has a supportive and collaborative network of various stakeholders in the startup ecosystem, such as incubators, accelerators, mentors, investors, corporates, academia, government, etc., that provide guidance, funding, infrastructure, and market access to the startups. India also has a favorable regulatory and policy environment for startups, such as the Startup India initiative, the Atmanirbhar Bharat Abhiyan, the Digital India program, etc., that offer various incentives and benefits to the startups, such as tax exemptions, patent protection, ease of doing business, etc.

Top AI Startups in India

There are many AI startups in India that are creating innovative and impactful solutions for various domains and sectors, such as healthcare, education, agriculture, retail, finance, etc. Here are some of the top AI startups in India that are leading the AI race in 2020:

• Manthan: Manthan is an AI-based analytics company that was founded in 2003 with an initial investment of $98 million. The company’s AI-powered retail analytics platform provides prescriptive and descriptive analytics for users, grow customer engagement, and recommend actions. Manthan’s AI platform caters to 170 customers across 21 countries. It helps them in various areas such as marketing, customer targeting, inventory, pricing, and promotions. The Bengaluru-based company also has a Natural Language Processing (NLP) engine called Maya. Maya acts as a business assistant and can answer questions such as sales trends, last month’s profits, etc. In 2018, Forrester Research named Manthan as a strong performer in its Customer Analytics Solutions Wave Q2 report.
• SigTuple: SigTuple is a healthcare startup that uses AI and machine learning to develop medical diagnostic solutions. The startup was founded in 2015 with an initial funding of $25 million. SigTuple’s AI platform is built to perform screening and advanced diagnosis of urine, blood, semen samples, along with retinal scans and X-rays. A patient’s samples are first analysed by SigTuple’s AI algorithms. They are then sent to a pathologist for review and finally sent back to the point-of-care in 5 minutes. So in this process, initial diagnosis is done quickly and ambulances can be dispatched to carry emergency medicines to patients. The Bengaluru-based startup has partnered with various hospitals, diagnostic centers, and medical device manufacturers to provide its services. SigTuple has also received several awards and recognitions, such as the Google Demo Day Asia 2018, the NASSCOM Emerge 50 Awards 2018, the Frost & Sullivan India Best Practices Awards 2018, etc.
• Nextbillion AI: Nextbillion AI is a mapping platform for enterprises that was founded in 2020 by three former Google Maps executives. The startup uses AI & machine learning to provide hyperlocal and customized mapping solutions for various use cases, such as navigation, routing, geocoding, geofencing, etc. Nextbillion AI helps enterprises address all the map-related requirements, such as last-mile optimization, managing road restrictions, and finding the best-suited route for vehicles. The startup is headquartered at Singapore, with offices in Bengaluru, Hyderabad, and Beijing. Nextbillion AI has mapped over 200,000 kilometers of roads, managed over 100,000 restrictions, and handled over 200 million API calls. The startup has also raised $7 million in seed funding from Lightspeed Venture Partners, Falcon Edge Capital, and Microsoft’s venture fund M12.

Challenges and Opportunities for AI Startups in India

While India has a lot of potential and advantages for AI innovation and entrepreneurship, there are also some challenges and barriers that need to be overcome. Some of these challenges are:

• Lack of quality data: While India has a lot of data, not all of it is of high quality, accuracy, and relevance. Many of the data sources are fragmented, inconsistent, outdated, or incomplete. This poses a challenge for the AI startups to obtain and process the data that is suitable for their use cases and models. Moreover, there are also issues of data privacy, security, & ownership that need to be addressed and regulated.
• Lack of infrastructure and resources: AI is a resource-intensive technology that requires high-end hardware, software, and cloud services to run and scale. Many of the AI startups in India face challenges in accessing and affording these resources, especially in the rural and remote areas. There is also a lack of adequate and reliable power supply, internet connectivity, and bandwidth that can hamper the performance and delivery of the AI solutions.
• Lack of awareness and adoption: AI is still a new and emerging technology for many people and organizations in India, and there is a lack of awareness & understanding of its benefits and applications. Many of the potential customers and users of the AI solutions are hesitant or resistant to adopt them, due to various reasons, such as lack of trust, fear of job loss, cultural and social barriers, etc. There is also a need to educate and train the end-users and stakeholders on how to use and leverage the AI solutions effectively and ethically.
• Lack of talent and skills: AI is a complex & multidisciplinary field that requires a combination of technical, domain, and soft skills. There is a shortage of qualified and skilled AI professionals and experts in India, who can design, develop, and deploy the AI solutions. There is also a gap between the industry demand and the academic curriculum, as many of the educational institutions do not offer adequate and updated courses and programs on AI and related fields. There is also a need to upskill and reskill the existing workforce and professionals to cope with the changing and evolving AI landscape.

Despite these challenges, there are also many opportunities and prospects for the AI startups in India, such as:

• Large and diverse market: India has a large and diverse market, with over 1.3 billion people, of which over 600 million are under the age of 25. India also has a growing middle class, with over 300 million people, who have increasing disposable income and spending power. India also has a variety of sectors and domains, such as healthcare, education, agriculture, retail, finance, etc., that have a huge demand and potential for AI solutions. These factors provide a huge opportunity for the AI startups to create and offer solutions that cater to the needs and preferences of the Indian market, and also tap into the global market.
• Government initiatives and policies: The Indian government has taken several initiatives and policies to support and promote the AI ecosystem in India, such as the National Strategy for Artificial Intelligence, the National AI Portal, the AI for All initiative, etc. These initiatives and policies provide various incentives and benefits to the AI startups, such as funding, infrastructure, data, market access, regulatory support, etc. The government has also identified and prioritized some of the key sectors and domains for AI intervention, such as healthcare, agriculture, education, smart cities, and smart mobility and transportation, and has launched various programs and projects to implement and deploy AI solutions in these sectors and domains.
• Innovation and collaboration: India has a culture of innovation and entrepreneurship, with many young and talented individuals and teams who have the passion and vision to create and solve problems using AI and related technologies. India also has a collaborative and supportive network of various stakeholders in the AI ecosystem, such as incubators, accelerators, mentors, investors, corporates, academia, government, etc., who provide guidance, funding, infrastructure, and market access to the AI startups. India also has a strong presence and participation in the global AI community, with many Indian AI researchers, experts, and entrepreneurs contributing and collaborating with their counterparts from other countries and regions.

Tips and Resources for Aspiring AI Entrepreneurs and Enthusiasts

If you are an aspiring AI entrepreneur or enthusiast, and want to start or join an AI startup in India, here are some tips and resources that can help you:

• Identify a problem and a solution: The first and foremost step is to identify a real and meaningful problem that you want to solve using AI, and a viable and scalable solution that you want to offer. The problem and the solution should be aligned with your passion, skills, and domain knowledge, and should also have a clear and measurable value proposition and impact for the customers and the society.
• Validate your idea and market: The next step is to validate your idea and market, by conducting research and analysis, and getting feedback and insights from the potential customers and users, and the industry experts and mentors. You should also study and understand the market size, demand, competition, trends, and opportunities for your idea and solution, and refine and iterate your idea and solution accordingly.
• Build a prototype and a team: The next step is to build a prototype and a team, by developing a minimum viable product (MVP) that demonstrates the core features & functionalities of your solution, and testing and improving it with the customers and users. You should also build a team that has the right mix of technical, domain, and soft skills, and shares your vision and values, and can work together to execute and deliver your solution.
• Launch and grow your startup: The final step is to launch and grow your startup, by finding and acquiring the customers and users, and generating revenue and traction for your solution. You should also seek and secure funding, infrastructure, and market access from various sources, such as incubators, accelerators, investors, corporates, government, etc., and scale and expand your solution to new markets and segments. You should also keep innovating and improving your solution, and adapting and evolving with the changing and emerging AI landscape.

Here are some of the resources that can help you learn and explore more about AI and related fields, and connect and collaborate with the AI community in India:

• National AI Portal: The National AI Portal is a one-stop platform for all AI-related resources and activities in India. The portal provides access to AI tools, datasets, publications, courses, events, news, and opportunities for AI enthusiasts, researchers, students, startups, and industry. The portal also showcases the AI initiatives and achievements of various government departments, academic institutions, and private organizations in India.
• AI for All: The AI for All initiative is a program to create awareness and educate the masses about AI in India. The program offers a free online course on the basics of AI, covering topics such as AI applications, AI ethics, AI careers, etc. The program also provides access to various AI platforms, such as CoE AI, AI Classroom Series, AI Game Changers, etc., that offer advanced learning and mentoring opportunities for AI aspirants and enthusiasts.
• AI Garage: The AI Garage is a platform for AI enthusiasts and learners to access and use various AI tools and frameworks, such as TensorFlow, PyTorch, Keras, etc., and build and deploy AI projects and applications. The platform also provides access to various AI datasets, tutorials, blogs, videos, podcasts, etc., that can help the users to learn and explore more about AI and related fields.
• AI India: The AI India is a community of AI enthusiasts, learners, and professionals in India, who share their knowledge, experience, and insights on AI and related fields. The community organizes and participates in various AI events, meetups, workshops, hackathons, etc., and provides mentoring and networking opportunities for the members. The community also publishes and curates various AI resources, such as blogs, podcasts, newsletters, etc., that can help the members to stay updated and informed about the latest developments & trends in AI.

FAQs

Q. How many AI startups are there in India?

A. According to a report by Nasscom, India has over 1,600 AI startups as of 2020, ranking third in the world.

Q. What factors have contributed to help the rise of AI startups in India?

A. Several factors have contributed to the rise of AI startups in India, including a large talent pool, availability of data, government support, and a vibrant startup ecosystem.

Q. What are some successful AI startups in India?

A. Some successful AI startups in India include Manthan, SigTuple, and Nextbillion AI, which are leading the AI race in various sectors such as retail analytics, healthcare, and mapping solutions.

Q. What challenges and opportunities do AI startups in India face?

A. AI startups in India face challenges such as lack of quality data, infrastructure, awareness, and talent. However, they also have opportunities in a large and diverse market, government support, and a culture of innovation and collaboration.