India’s Generative AI Funding Surges to $400 Million in 2024, Doubling Deal Count

Generative AI funding in India surged to $400 million in 2024, up from $250 million in 2023, driven by increased enterprise adoption of AI-powered applications. Investments included funding for Gen AI-native startups and AI-integrated software firms, with around 70% directed toward applications and platforms rather than foundational models. While global AI funding favored capital-intensive projects like OpenAI and Anthropic, India’s AI model funding shifted to fewer but larger deals, such as Krutrim AI securing $50 million.

The number of Gen AI funding deals nearly doubled from 17 in 2023 to 33 in 2024, though the average deal size declined from $15 million to $11.8 million. Increased interest in no-code AI platforms like Kore.AI and domain-specific LLMs, such as Jivi AI’s medical models and Setu’s BFSI-focused ‘Sesame,’ contributed to this growth. Looking ahead, funding is expected to focus on growth-stage and late-stage AI startups. Additionally, overall SaaS funding grew 1.2x to $1.7 billion, fueled by international expansion and demand for development tools, while BFSI and consumer/retail sectors also saw significant investment growth.

India’s Generative AI Funding Surges to $400 Million in 2024, Doubling Deal Count

India’s generative artificial intelligence (Gen AI) sector witnessed a significant funding surge in 2024, reaching approximately $400 million—a sharp rise from $250 million in 2023—according to a joint report by Bain & Company and the Indian Venture Capital Association (IVCA). This growth reflects the increasing integration of AI-driven applications and platforms into enterprise operations, signaling a transformative shift in business technology adoption. Generative AI, a subset of artificial intelligence, focuses on creating original content such as text, images, code, and audio through advanced algorithms. Unlike traditional AI, which primarily analyzes data, Gen AI emphasizes innovation, enabling the development of chatbots, design software, and automated coding tools.

Investment trends in India highlighted a strong focus on AI applications and platforms, which accounted for 70% of total funding. In contrast, global funding leaned toward capital-heavy foundational models, with major players like OpenAI and Anthropic securing substantial investments. In India, funding for foundational models was limited to fewer but larger deals, driven by long-term market potential and high valuations. A key example was Ola’s Krutrim AI, which raised $50 million in early 2024, attaining unicorn status and reinforcing investor confidence in domestic AI innovation.

The number of Gen AI funding deals nearly doubled, increasing from 17 in 2023 to 33 in 2024, though the average deal size declined from $15 million to $11.8 million. This shift indicates a broader entry of early-stage ventures into the market, driven by platforms like Kore.AI that simplify AI development and niche large language models (LLMs) such as Jivi AI’s healthcare tools and Setu’s BFSI-focused ‘Sesame,’ which address industry-specific challenges while optimizing development costs. As enterprise adoption continues to rise, Gen AI investments are expected to transition toward growth and late-stage funding rounds, supported by India’s strong engineering talent pool and access to localized training data. Additionally, dedicated funds for AI-driven ventures are expected to sustain investment momentum.

Beyond Gen AI, India’s broader tech landscape also saw notable expansion. The software and SaaS sector experienced a 1.2x increase in funding, reaching $1.7 billion, fueled by demand for development tools, global market strategies, and mature digital assets. Meanwhile, funding in the BFSI sector surged 3.5x to $1.1 billion, primarily driven by non-banking financial companies (NBFCs) in affordable housing. The consumer and retail sectors nearly doubled their investments to $1 billion, spurred by premiumization trends, rising discretionary spending, and agile business models in food, beverages, and fashion.

Overall, India’s investment landscape in 2024 reflects a dynamic blend of innovation and market readiness. The rapid rise of Gen AI, alongside significant growth in SaaS, BFSI, and consumer sectors, highlights the economy’s adaptability and technological ambitions. As AI integration becomes a business priority, India’s combination of talent, localized data, and strategic funding positions it as a strong contender in the global tech ecosystem.