India has strengthened its position in the global Generative AI (GenAI) landscape, ranking 6th among major economies in the share of GenAI startup ecosystems. The country’s GenAI ecosystem has demonstrated strong and broad-based growth, with significant advancements in innovation, funding, and talent development. Since the first half of 2024, innovative startups such as Nurix AI, Dashtoon, and Mihup have led the way with transformative solutions in workflow management, digital comic creation, and conversational analytics for contact centers. To capture the rapidly shifting GenAI startup landscape, Nasscom has released the key findings from its Generative AI Tracker: Tech Industry Activity in Q2FY2025.
The report highlights a 6X quarter-on-quarter (q-o-q) surge in investments, fuelled primarily by B2B platforms and productivity solutions. Funding activity gained significant momentum in Q2FY2025, with a record 20 funding rounds, marking a strong recovery after a sluggish Q1.
Key Findings from the Report
Funding Rebound Led by Applications and Services
o Total funding grew 3.4X year-on-year, led by investments in enterprise applications and Agentic AI.
o Funding rounds grew by 3X in Q2 of FY2025, with early-stage investments accounting for 77% of all rounds, including angel and seed funding.
Sustained Growth in Tech Providers’ GenAI Activities, led by a strong uptick in product and go-to-market partnerships
o Providers shifted from building use case portfolios to converting active PoCs into production-ready solutions.
o Partnerships surged by 25% q-o-q, focusing on product enhancements, joint go- to-market strategies, and government-led skilling initiatives.
o Active PoCs and production use cases boosted the GenAI revenue pipeline, with stronger realizations reported.
Shift to Advanced AI Skilling and Thematic Upskilling
o Talent strategies transitioned from basic AI literacy to advanced and thematic upskilling, emphasizing platform integration and agentic AI capabilities.
The increasing maturity of the Indian GenAI ecosystem reflects its transition from exploratory use cases to scalable, production-ready solutions. This growth is fuelled by improving funding inflows, rising revenue realizations, and expanding applications in enterprise productivity and customer engagement.
Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, stated:
“The generative AI landscape is evolving rapidly, reshaping technology service providers and unlocking new capabilities. Providers are reevaluating strategies and increasing investments in technology and talent. Q2FY2025 marked a key shift in India’s GenAI space, with funding focused on impactful applications that enhance productivity. Future success will rely on strategic innovations, pilot project results, and lessons learned along the way.”
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