AI Reshapes Indian Tech Landscape: From Startups to IT Giants

42 Indian Tech & Startup Predictions For 2025

Our tech and startup predictions for 2025 -- from the state of IPOs, to what will happen after the quick commerce boom and how the GenAI revolution will shape up in 2025 We're so back! On the first day of 2025, the mood in the startup ecosystem is in stark contrast to how 2024 began. A positive and bullish sentiment is running strong among startup founders and investors as the Indian tech and startup ecosystem showed its tenacity, maturity and resilience in 2024 after two years of introspection and course correction. And so we move on to 2025, beginning as usual with our list of predictions for the tech and startup ecosystem in the year to come. Our Indian Tech Outlook 2025 series has delved into individual sectors such as GenAI, climate tech and gaming, and we will continue to dive deeper into key sectors such as fintech and ecommerce through the first week of the new year. But right now, the spotlight is on the trends that will dominate the year to come, based on which we can make 42 tech and startup predictions for 2025 -- from the state of IPOs, to what will happen after the quick commerce boom, how the GenAI revolution will shape up and what to expect from the all-important VC and investor ecosystem. Inc42's Tech Predictions For 2025 When we did this exercise last year, we laid down around 25 predictions for 2024, and we are pleased to report that just a couple were off the mark, with 22 of our predictions coming true in 2024. These include the increasing reliance on platform fees by consumer services startups, consolidation in the VC space, testing times for Paytm, the big GenAI push among enterprises, and more. Some of these trends continue in 2025, including the bigger spotlight on GenAI, profitability and IPOs. So without further ado, here's a look at our 42 tech and startup predictions for India in 2025: Number Of Indian Startup IPOs To More Than Double In 2025 The Indian startup ecosystem is poised for a historic IPO surge in 2025, with at least 23 new-age tech startups already on course to join the public markets. This would be almost double the tally of 2023, when 13 new-age tech companies had their IPOs. The trend of smaller IPOs will also continue in 2025, as startups look to seek rightsized valuations from public markets investors. Collectively, listed companies raised INR 29,000 Cr ($3.4 Bn) from the public markets in 2024, and with the likes of PhysicsWallah, Ather Energy, BlueStone, CarDekho, OYO, and OfBusiness expected to launch their IPOs this year, this number could well also double. The surge in public listings reflects growing confidence among tech startups around becoming ready for public markets, and with high interest for new-age tech stocks among retail investors as evidenced by the massive interest for MobiKwik and Swiggy at the end of 2024. Pre-IPO Rounds Will Become More Prominent The definition and scope of pre-IPO rounds are changing rapidly in the Indian startup ecosystem. Now, most rounds up to two years before an IPO are considered part of the pre-IPO phase, and several companies have already reached this point in 2024, including the likes of OYO and PhysicsWallah. In 2025, we will see more and more companies raising large rounds in preparation for an IPO, especially with the emergence of specialised pre-IPO funds, increased participation from domestic HNIs and family offices that are looking to make gains and PE funds. According to investors, pre-IPO rounds are becoming crucial liquidity events for early investors and are helping companies build stronger foundations before going public. Listed Tech Companies On QIP Route In 2024, Zomato raised INR 8,500 Cr through a QIP, followed by Nazara's INR 855 Cr preferential placement, and Zaggle which netted INR 595 Cr from its QIP. In 2025, we expect several such QIPs from the cohort of startups that went public between 2021 and 2023. Listed companies in competitive sectors such as fintech and consumer tech segments prefer QIPs for fundraising as a means to reduce the regulatory and financial burden compared to options such as debt, secondary or rights issues. For instance, a QIP round would suit companies in competitive sectors such as Paytm or Nykaa, or even those like PB Fintech which are looking to expand into new segments. Typically, such funds are allocated to new lines of business that came up after the public listing, such as acquisitions of adjacent or new verticals, investments in technology infrastructure (AI, in this day and age) or just for customer acquisition and brand-building for the long-term. SEBI's Eye On SME IPO Boom India's IPO market commanded an impressive 36% share of total global listings in Q3 2024, with 298 small and medium enterprises (SMEs) hitting the public markets. However, the glut of SME IPOs has also drawn SEBI's attention. The regulator's focus is shifting decisively towards quality over quantity, with new rules expected to address issues such as pricing transparency, promoter backgrounds, and business sustainability. Remember the case of a Delhi-based motorbike dealer's IPO which sought to raise INR 12 Cr but received bids worth INR 4,800 Cr? That's for a business that just has two stores in the capital region. SEBI is looking to curb such frothy enthusiasm in the market and protect retail investors while continuing to support the growth and maturity of the SME ecosystem. Strategic M&As In Growth Stage After a 20% spike in funding for the year in 2024, the next year is expected to see an even bigger jump. But when it comes to M&As the picture was bleak in 2024. Mergers and acquisitions fell to an all-time low since 2014, and a lot of these acquisitions were distress sales or fire sales. While this trend is likely to continue, one new factor could very well emerge in 2025. That's listed new-age companies eyeing growth-stage startups with proven business models, and a measurable revenue boost. Sectors like fintech, enterprise tech, and consumer services are most likely to see this wave of established players acquiring startups either for the tech or to add new verticals. See the point about QIPs. PE Activity To See Uptick In 2025 Private equity (PE) activity in India saw a near 25% growth in 2024 (January to November) touching $30.89 Bn across more than 1,000 deals. The streak of IPOs (even outside the startup ecosystem) has given fresh confidence to PE investors, with a huge inflow for healthcare, green energy and manufacturing. These are likely to be the big sectors for PE investors in 2025 as well. Secondary Deals To Shoot Up The wave of secondary deals in 2024 saw more than a dozen such deals, which gave early investors exits from the likes of Capillary, ixigo, Urban Company, Porter, and Pocket FM, among other startups. Expect more such deals as funds from the 2012-2013 vintage reach expiry dates in 2025, and VCs look to offload their portfolio to return funds to the LPs. Enterprise Tech M&As To See A Boost In the same vein as secondaries, we expect M&As to grow for sectors such as enterprise tech which are going through the AI churn and revolution. SaaS companies are shopping for tech capabilities, focussing on IP-led tech acquisitions. Watch for consolidation in areas like cybersecurity, cloud computing, and AI-enabled enterprise applications. Edtech Consolidation On The Cards The edtech sector is also expected to be in for significant consolidation in 2025, with even unicorns likely to be acquired, particularly with continued speculation around Unacademy. The market is maturing beyond the pandemic boom, and with the focus on sustainable business models, there's little room for the splurging VC dollars as seen in the past. Watch for interesting combinations of online and offline models, particularly in test preparation and skill development segments. The public listing of PhysicsWallah is also likely to be preceded by a few acquisitions, especially as the edtech giant continues its multi-product strategy. The End Of BYJU'S This one is not exactly a stretch because the edtech giant was slammed left right and centre over the past year for its corporate governance issues, financial mess and serious allegations against cofounder and CEO Byju Raveendran of misappropriation of funds. But after months of being in the insolvency resolution process in 2024, BYJU'S will finally find a suitor in 2025 that could look to either sell the assets and write off the company, or put a new management in place and start anew. Either way, the BYJU'S we know will more or less cease to exist this year Legacy OEMs To Push EV Accelerator India's legacy automobile OEMs are finally waking up to the EV revolution, responding to the clarion call by Ola Electric, Ather Energy, Revolt, Pure EV and other startups that continued to gain market share in 2024. In fact, towards the end of the last year, legacy players had already begun leveraging their manufacturing expertise, established dealer networks to gain market share at the expense of startups. The Year For Electric Cars The next big opportunity in India's EV sector will come from electric cars. Mahindra, Tata, Maruti Suzuki, BYD, MG Motor and others will continue adding to their growing lineup of electric cars, backed by commercial adoption in the ride-hailing and corporate travel segment. Next Phase For EV Charging Infra As the EV battlefield expands beyond two-wheelers, the onus is on companies to invest in charging infrastructure and battery technology, which are long-term moats. India Inc will need to take charge of EV infrastructure development, as this involves capital expenditure and the funds for that are often out of reach of startups. But building up EV charging infra capacity will take more than just a push from EV companies. Major real estate developers, retailers, and hospitality chains will need to adopt EV charging stations into their properties to attract a more premium clientele that will adopt high-tech electric cars. Tesla's India Entry Imminent And speaking of premiumisation, Tesla's official entry into India didn't happen in 2024 but that could swiftly change. Tesla has shown some indications of its intent to invest in India, but a regulatory hurdle or two has always kept the Elon Musk-led EV giant out of the market. Will the penetration of larger OEMs in the EV segment spur Musk to finally bring Tesla to India? One out-there take is that Tesla will partner with a local entity to enter the Indian market, just like Apple did, but establishing charging infrastructure will be critical for any plans Tesla has given the current state in that regard. Extended Reality's First Steps In Retail India's retail landscape is set for a revolutionary transformation through extended reality (XR) technologies, potentially bringing a sci-fi touch to neighbourhood kirana stores. Of course, a lot of this is hardware dependent but major plans are afoot from Google, Samsung and Apple to bring XR to the masses in the near future. Most electronics companies view this as the future of mobile computing, and major retailers will start investing in AR/VR solutions in 2025 to enable immersive shopping experiences The integration of XR is expected to bridge the gap between online convenience and offline experience, creating the 'phygital' retail segment 'Phygital' Quick Commerce Quick commerce was the flavour of the year in 2024, but a number of new startups are looking to shed the dark store model for a retail-first model with delivery as an add-on. The likes of FirstClub, The New Shop, and others are raising funds and expanding rapidly to tap into this wave. Expect these to compete with Blinkit, Zepto and Instamart, but we won't be surprised if some of these become acquisition targets for giants. Vertical Quick Commerce On The Up Vertical-specific quick commerce models are emerging, with companies specialising in categories like fresh meat (Meatigo, Licious), medicines (Plazza, 1MG), fashion (Myntra, Slikk, Blip), food (Swiggy, Swish, Zing). While many of these platforms have the scale to sustain these quick commerce operations, several new startups will likely be at the mercy of VC funding to scale up. Will investors back these new QC models or will these startups just become more acquisition targets for the giants? Consolidation On The Quick Commerce Front Within QC, the focus for major players is shifting from customer acquisition to operational efficiency and sustainable unit economics either through the right product assortment or new categories. It won't be a surprise if some of this consolidation happens on the brand front if and when the delivery apps push for more private labels. Cafe Wars In The Metros Expect a tooth-and-nail battle in India's metros for 10-minute cafe deliveries. Zepto Cafe, Blinkit Bistro and Swiggy Bolt have thrown the gauntlet but other startups are also emerging, essentially turning the cloud kitchen model on its head. Expect to see AI-driven demand mapping and automation in the kitchen being billed as moats for these apps. Policy Scare For Quick Commerce It won't be all rainbows and sunshine for quick commerce though. Ten-minute deliveries are big business, with the three major companies reporting more than INR 7,500 Cr in revenue in FY24. But the impact of this growth is keenly felt by kiranas that claim to have suffered major losses due to the expansion of these quick commerce companies. From a regulations point of view, the focus is also likely to be on gig worker policy, working conditions and hours, besides the impact on kiranas and retailers, if the past few months have been any indication. There are also health and safety concerns related to expired or damaged products, and there could even be new rules pertaining to foreign investments in quick commerce. D2C & House Of Brands Evolution It's just not been a year for D2C startups or houses of brands. D2C startups raised more than $595 Mn across 115 deals in 2024, a steep decline from $1.4 Bn from 134 deals in 2023. However, with consumer preferences remaining just as dynamic as the past year, we could see a big rebound, if there are particular undercurrents or trends that emerge over the course of the year. The growing adoption of digital platforms in Tier II and III cities will also open the doors for further expansion for brands, particularly those riding the quick commerce wave. However, the house of brands model is quickly fading away, especially as marketplace reliance drops among online shoppers. Payments Apps Continue To Inch Beyond UPI India's payment apps should be preparing for life beyond UPI in early 2025. While UPI is still the backbone of digital payments in India, fintech startups have looked to diversify by offering credit, wealth management, payment aggregator and international remittances services. UPI's monetisation challenges could still take a few years to be solved, but super apps will continue to leverage it as an acquisition channel for cross-selling. Startups are exploring cross-border payments, targeting the massive NRI market and Indian diaspora that's become familiar with UPI. Fintech Super Apps Might Rethink Digital Commerce Push India's fintech super apps are evolving into digital commerce storefronts, expanding beyond financial services to shopping, travel bookings, and lifestyle services. While the idea is to boost customer stickiness and lifetime value, competing with dedicated platforms such as ecommerce marketplaces or OTAs has a huge bearing on how profitable these verticals are for fintech startups which have to continuously market the apps to boost engagement. Jio Financial Services Will Shake Up Competition Taking baby steps in 2024, Jio Financial Services (JFS) is looking like the next big thing in Indian fintech. Throughout the past year, we have noted that JFS is a threat to fintech startups. The company is coming for every fintech startup -- from banking to payments to digital lending to insurance to investment and even an AMC. And by virtue of being the most capitalised fintech company in India (roughly $25 Bn), it's coming into the arena with a huge advantage. Growing Profitability Pressure On Paytm The spotlight on Paytm's path to profitability will only intensify in 2025, especially after the company focussed on shoring up its financial state in 2024 through cutbacks and sale of key assets. With CEO Vijay Shekhar Sharma claiming to be building an AI-first Paytm, the company could well turn around its losses in 2025 after a period of disruption in 2023 and early 2024. Adani's Fintech Ambitions Incidentally, the Adani Group was speculated to be in talks with Paytm for a stake acquisition in the company. This would solidify the conglomerate's fintech ambitions. In its present state, the Adani One super app strategy hinges around travel and airport services but also includes digital lending and supply chain financing. The company also launched a co-branded credit card in collaboration with ICICI. If JFS is the biggest threat for fintech startups in 2025, it would be a mistake to ignore the potential scale that Adani One can reach with its strengths in the logistics, transport, FMCG and energy sectors. Fintech Reverse Flipping Parade To Go On Pine Labs, Groww, Razorpay, Freo -- these are just some of the Indian fintech companies looking to flip back to India after being registered abroad since inception. A lot of this has to do with easing the engagement with financial services regulators and for easier taxation, and the reverse flipping parade is expected to continue for payments companies and lending platforms, where local presence is crucial for regulatory compliance. SaaS-AI Convergence To Continue Unabated The line between traditional SaaS and AI is fast blurring, as evidenced by the transformation seen by large SaaS giants such as Salesforce, Freshworks and Zoho. Other Indian SaaS companies are also busy integrating AI capabilities across their product suites to stay relevant in 2025. The AI-SaaS convergence is particularly evident in HR, customer service, sales automation, marketing workflows and data analytics solutions. Companies will look to leverage India-specific language models in 2025, to unlock the SaaS value that's thus far remained underpenetrated in India. As a result of the convergence, SaaS giants are expected to go on an AI shopping spree, looking to acquire companies with specific AI capabilities including but not limited to natural language processing, computer vision, and predictive analytics, which can be infused into their SaaS products. Big Tech Will Drive Agentic AI Models Like around the world, India is set to witness a surge in agentic AI models, with tech giants and startups building innovations to take GenAI to the next stage. In December 2024, Google launched Gemini 2.0 language model which is said to herald 'a new agentic era'. These are AI solutions that can perform complex workflow tasks and meet objectives with little or no human supervision. Deloitte predicts that 25% of companies that use GenAI will launch agentic AI pilots or proofs of concept in 2025, which will grow to 50% in 2027. India has also started embracing this leap. Ethical AI And Policy Framework While significant steps towards regulating AI were missing, there's definitely a wave of startups looking to embrace ethical AI in an effort to self-regulate the sector. The conversation around global AI regulations started taking shape in 2024, and is likely to become more concrete in 2025. The Indian government's INR 10,372 Cr IndiaAI Mission has mentioned ethical AI as one of the key objectives out of the seven initiatives it wants to focus on over the next five years. Besides this, the concept of "responsible AI" has also evolved, and will continue to delve into compliance, transparency, data security as well as tangible benefits to humanity as debate points in 2025. AI Video On The Cusp Of Breakout OpenAI's Sora, Kling, Pika, Veo -- these are the first AI video platforms that will soon usher in the era of AI-generated videos, taking content creation to the next level. While Indian startups such as Invideo and others have already created automated video editing and creation platforms, a world of completely AI-generated videos created with just one prompt sounds revolutionary. Indeed, this opens up a whole range of possibilities for edtech startups, digital media and D2C brands that have thus far experimented with AI text or images. The Year Of Mixed Reality When Apple launched the Vision Pro in 2023, it sent a signal that the next battleground for electronics giants will be mixed reality (MR) headsets. Then in late 2024, Google outlined its own plans for MR, and now we are well and truly on the cusp of the AR/VR inflection point. Call it mixed reality or extended reality, Indian early adopters will start experimenting with these devices this year, with products also on the cards by the end of the year. Government's AI And Semiconductor Focus To Sharpen When it comes to the government's focus, we know for sure that AI and semiconductors are the two big beacons. The upcoming budget in February is expected to give a significant thrust to AI and semiconductor initiatives, treating them as strategically as India's spacetech sector, which received a big boost last year. Watch out for policies that encourage collaboration between academic institutions and industry players, particularly in areas like chip design and AI hardware. The focus will be on reducing dependency on imports for semiconductors and pushing for more IP-led innovation in chip and electronics systems design On the AI front too, the government's attention will be on building domestic capabilities in cloud computing, AI infrastructure. As part of its IndiaAI MIssion, the central government is also working to deploy over 10,000 GPUs through strategic public-private collaborations. Consumer Spending Boost Imminent In 2025 Reports towards the end of the year suggest that finance minister Nirmala Sitharaman would look to boost consumer spending and usher in tax relief for the middle class in the Union Budget in February 2025. A Reuters report claimed that the government would cut income tax for individuals making up to INR 15 Lakh per year, which would be a relief for many Indians whose salary hikes have not kept pace with inflation. Crypto Startup Revival India continues to lead in global cryptocurrency adoption for the second consecutive year, and in 2025, the cryptocurrency ecosystem is expecting a major boost from the US federal government, which spells good news for the rest of the world too. Despite regulatory uncertainties, funding is expected to return to crypto startups focussing on infrastructure and enterprise applications, rather than just trading platforms. As the crypto investor ecosystem matures, companies will look to bolster cybersecurity ops and antifraud action in light of the WazirX fiasco in 2024. Composite AI Will Change Distribution With the increasing dependence on GenAI to solve complex business problems and workflows, native GenAI companies are slowly integrating multiple AI methodologies to create stage and size-agnostic AI solutions. Some industry leaders have dubbed this composite AI, which largely uses classic natural language processing (NLP), GenAI, and predictive AI to provide more nuanced output. Gartner said in a research report this year that composite AI represents the next phase in AI evolution. Rather than focusing solely on GenAI, AI leaders must look to composite AI techniques where there's a lot more value to be unlocked. India's Green Hydrogen Ambition Grows Taller Green hydrogen is the north star for India's clean energy project. The push for public-private partnerships resulted in collaborations between state-run corporations and businesses. Investors would be watching this space keenly to see which companies are able to engage with government organisations more regularly. This is similar to how companies in the drone and defence tech industry have to go about scaling up. Besides VC dollars, the ground will remain open for PE players, government grants and corporate venture capital funds to back green hydrogen startups that can partner with large power companies. Netflix Dives Deeper Into Live Sports Netflix may not have IPL in India, but it has scored something of a coup with WWE streaming rights for the country, as well as the FIFA Women's World Cup in 2027 and 2031. This came after the wildly-popular boxing match between Mike Tyson and Jake Paul which got 65 Mn viewers. While localising content will be a key moat against the upcoming JioCinema-Hotstar juggernaut, live sports could give Netflix a big boost, especially when WWE has 350 Mn TV viewers in India. GenAI Gives Speed To Game Development Generative AI has captured the attention of the world, and it's true for gaming too. For example, game developers have already started using GenAI tools such as Sora, Pika, Claude AI, Cursor, and DALL-E 2. The use of AI-powered platforms are helping game developers to create richer experiences with reduced time and resources, Nitish Mittersain, joint MD and CEO of listed giant Nazara Technologies, told Inc42 earlier. Rapid advancements in AI creation tools are bridging the talent and capital gap that Indian startups struggled with in the past. Satellite Internet Services To Grow In Stature Reliance Jio got the go-ahead for satellite internet services in 2024, adding another pipeline to Reliance's telecom arsenal, but in 2025, we are likely to see other companies also jumping into the fray. However, regulatory hurdles will be a thorn in the side of foreign companies looking to take on Jio, as experienced by Musk's Starlink in 2024. India's Short Drama Moment ReelShorts, DramaBox, MoboReels, Topshorts, ShortMax, Goodshorts -- these are the apps that are driving the short drama mania in China and Southeast Asia, and now it's India's turn. In fact, India is set to get its first vertical video and short drama platform 'Reelies' in 2025. Interactive, episodic storytelling and personalised content delivery are some of the hallmarks of short drama apps. One step ahead of short videos, these mini dramas are specifically designed for mobile consumption and ideal for the Indian market, where some companies have seen success with micro-transactions for such short-form content. More Making In India For Apple, Samsung After the Indian government heightened restrictions on import of laptops and tablets in 2024, a number of PC makers have turned to manufacturing and assembling such devices in India, adding to their smartphone assembly lines. In early 2024, Samsung became the first foreign brand to initiate local laptop manufacturing in India, having set up capabilities in late 2023 in its existing Noida factory. Of course, Apple has also made a serious push in this regard over the past few years. In 2025, this is set to continue as the company is looking to move half of its existing supply chain from China to India. Apple's ecosystem of component makers and suppliers are projected to collectively employ around 5 Lakh people in India over the next few years. Apple is also boosting local component production to make the most of the production-linked incentive targets. The company is in advanced discussions with Murugappa Group and Tata Group to assemble and possibly manufacture components such as iPhone camera modules.

From The First AI Unicorn To The Death Of Angel Tax: The Biggest Highlights For Indian Startups In 2024

As Indian startup ecosystem steps into 2025 with renewed enthusiasm, let's recap the biggest achievements that headlined the homegrown new-age tech landscape in 2024 The Indian startup ecosystem truly came of age in 2024. Trends around profitability and strong fundamentals dominated the narrative for new-age tech companies in the year gone by, and became the highlights of 2024 for Indian startups. Not just this, the year gone by saw the emergence of new India-specific models like quick commerce and homegrown startups fervently embracing the generative artificial intelligence (GenAI) and semiconductor mania. Investors too realised this and cautiously loosened their purse strings. As a result, Indian startups bagged more than $12 Bn, venture capital (VC) firms raised $8.7 Bn+ worth of funds and six startups entered the unicorn club in 2024. What Stood Out In 2024: Indian Startup Highlights And the future looks even more promising. Inc42 estimates that the number of smartphone and internet users will surge beyond the 120 Cr mark by 2030. This will likely pave the way for a more vibrant digital economy, which, in turn, is expected to spawn new use cases that will create a new subset of new-age tech companies catering to a new gamut of India's burgeoning online users. A major highlight in 2024 was the public listing of 13 startups and the continuation of the IPO wave that began in 2021. These high-profile public listings for new-age tech companies brought lucrative returns for early backers of some of the biggest names in the startup ecosystem. However, funding winter continued to loom heavily over the startup ecosystem in 2024 too, the year of extended capital drought. Amid green shots of revival, macroeconomic headwinds, growing instances of corporate misgovernance and subdued investor faith continued to mar the homegrown startup landscape. Notwithstanding this, Indian new-age tech companies continued to push the envelope in 2024 and had their share of glory when it came to innovation and experimenting with new frontiers. With that sentiment in mind, let's take you on a journey through the key achievements of the Indian startup ecosystem in 2024. Indian Startup Funding Breached The $150 Bn Funding Mark In 2024 Even as the Indian startup ecosystem reeled under the impact of extended capital drought, the year 2024 had some silver lining as cumulative funding raised by homegrown new-age tech companies between 2014 and 2024 crossed the staggering $151 Bn mark. The biggest contributor to the tally was the FOMO-fueled 2021 when investors poured in $42 Bn in the Indian startups in a single year. However, the momentum slowed down soon after as the funding winter gripped the Indian startup ecosystem. As a result, funding declined to $25 Bn in 2022 and thereafter further to $10 Bn in 2023, which was significantly lower than pre-pandemic levels. Notably, 2024 witnessed signs of improvement as Indian new-age tech companies bagged a total of $12 Bn during the year as funding pangs waned and investors began deploying dry powder across the board. Welcoming The First AI Unicorn: Ola Krutrim Having minted just two unicorns throughout 2023, Indian startup ecosystem sprang a surprise as Bhavish Aggarwal-led Krutrim entered the coveted billion dollar valuation club in the first month of 2024 itself. Even though the homegrown tech landscape boasts of 118 unicorns currently, what was special about Krutrim was that it is India's first artificial intelligence (AI) unicorn. As term sheets flew in overnight, Krutrim graced the headlines, giving a major impetus to India's budding GenAI ecosystem. A brainchild of Aggarwal, Krutrim became the third unicorn from Ola's stable. Since then, the GenAI platform has taken on the might of big tech major Google as well as listed MapmyIndia as it looks to create a niche in the burgeoning AI-driven geotech market. It has also made no qualms about its ambitions to build a desi large language model (LLM) and to foray into the chip manufacturing space. Zomato Becomes First Indian New-Age Tech Company In The BSE Sensex 30 India's startup ecosystem cheered on as foodtech major Zomato became the first homegrown new-age tech company to enter the Sensex 30 index. The listed startup replaced JSW Steel, a 142-year-old steel giant, to grab a spot on the index that represents over 80% of BSE's total market value. What pushed Zomato into Sensex 30 was the multibagger stock's dream run on the bourses in the past one year. Having grown its profits multifold over the past six quarters, investors and brokerages alike have been bullish on the stock, which resulted in Zomato's massive bull run. In the past one year, shares of the foodtech major have soared more than doubled, driven primarily by its growth engine quick commerce vertical Blinkit, slew of new offerings like going-out app District and broad based growth across segments. Angel Tax Gets A Long-Awaited Eulogy After mounting an exhaustive campaign for the past 12 years, the Indian startup ecosystem broke in applause in 2024 as the government abolished the dreaded Angel Tax. Introduced in 2012 as one of the measures "to prevent the generation and circulation of unaccounted funds", the new-age tech ecosystem from the very outset was up in arms against the provision, which was allegedly used to "harass" startups who raised capital from investors. While many notices under the law resulted in startups shutting down, many other entrepreneurs also left the country to domicile their ventures overseas to escape the "draconian law". Unsurprisingly, the abolition of the Angel Tax was met with unequivocal praise and glee as industry stakeholders like 3one4 Capital's founding partner and chief financial officer (CFO) Siddarth Pai welcomed the post-Angel Tax era. However, questions remain over the pending cases, which are still a thorn in the feet of the growing Indian startup ecosystem. Ola Electric Becomes First EV Company On The Bourses Jumping on the startup IPO wave that gripped the country in 2024, electric vehicle (EV) maker Ola Electric became the first Indian new-age EV startup to go public. The move to list on the bourses was hailed as a landmark moment signalling India's readiness to embrace the rapid shift to electric mobility. Ola Electric's listing, despite catching the attention of stock market investors and analysts, made a muted debut on the stock exchanges but soon caught up as the stock has been witnessing a healthy uptick on the exchanges. That said, the year was also marked by missteps including customer complaints, fire incidents, a government probe into the company's poor after-sales service and founder and CEO Bhavish Aggarwal's public spat with comedian Kunal Kamra over issues with its EVs. Making matters worse was the company continuously losing its market share to legacy giants like TVS Motor and Bajaj Auto even as it continued to announce forays into new segments in 2024, including electric motorcycles, electric three-wheelers, and low-speed electric scooters. Agnikul Launches World's 1st Rocket With Fully 3D-Printed Engine Emblematic of the Indian spacetech ecosystem's reputation as a bastion of innovation, Agnikul added many feathers to its cap in 2024. The startup made history by launching indigenously designed and built Agnibaan SOrTeD (suborbital technological demonstrator), boasting the world's first single-piece 3D-printed engine, on May 30. It also became the first launch from a private launchpad (Dhanus) of the country's second privately built rocket. The launch of Agnibaan was also historic because it flew on a semi-cryogenic engine, in which a mix of liquid and gas is used as a propellant. The Agnibaan rocket is a customisable, two-stage launch vehicle that can carry up to 300 kg of payload to orbits, nearly 700 kilometers in altitude. Going forward, the startup is looking at flying an orbital mission in 2025. Founded in 2017 by Srinath Ravichandran, Moin SPM, and S R Chakravarthy, Agnikul was also the first Indian startup to sign an agreement with Indian Space Research Organisation (ISRO) in 2020, which granted the spacetech company access to ISRO's expertise and cutting-edge facilities. Pixxel Becomes First Indian Spacetech Startup To Grab Order From NASA Pixxel was in the news for all the right reasons in 2024. The biggest feat in the spacetech startup's kitty was that it secured a new contract from NASA to provide the space agency and the US government with hyperspectral Earth observation data. Awarded the contract under NASA's $476 Mn commercial smallsat data acquisition programme, the deal will be valid till November 2028. Under the collaboration, NASA will get real-time insights on climate change, agriculture, biodiversity, resource management, and more. In 2024, the spacetech startup also inked a deal with the Ministry of Defence under the Innovations for Defense Excellence (iDEX) scheme to manufacture miniaturised multi-payload satellites for the Indian Air Force. Pixxel also rolled in funds as it bagged $24 Mn in its Series B funding round. On the operational front, the company this year also announced the launch of its commercial satellite constellation, called Fireflies, slated for launch early next year. Not stopping there, the company also submitted its bid for building and managing a space-based earth observation (EO) system for Indian authorities. Founded in 2018 by Awais Ahmed and Kshitij Khandelwal, Pixxel is building a constellation of hyperspectral earth imaging satellites to detect, monitor and predict critical global phenomenon across sectors such as agriculture, mining, environment, among others. Apple Floats First R&D Subsidiary In India Having aggressively ramped up its manufacturing capabilities in the country for the past few years, Apple took the next logical step in its India evolution in 2024. The year saw the big tech major mark its first direct presence in the country as it set up its maiden research and development (R&D) subsidiary in India. Called Apple Operations India, the new arm will also focus on research, design, testing and providing support to third party manufacturers. The new subsidiary marks a turning point for Apple in India. Moving on from just assembling iPhones in India, the new subsidiary signifies Cupertino-based juggernaut's bid to increase the share of locally-made components, manufacture critical parts in the country and shore up its India manufacturing stack. Not just this, the year also saw Apple commencing the initial manufacturing of the yet-to-be-released iPhone 17 base model in India. The company plans to kick off the "introductory" production of the standard iPhone 17 in the country in the latter half of 2025 in partnership with a local vendor. On the operational front, Apple assembled $14 Bn worth of iPhones in India in the financial year 2023-24 (FY24). The company manufactured around 14% of its flagship devices in India last fiscal, which translated to about 1 in 7 iPhones. Mindgrove Rolls Out India's First Microcontroller Chip As semiconductor mania gripped the world, India was not far behind. Despite well-capitalised global challengers, homegrown semiconductor players emerged from shadows to disrupt the chip manufacturing ecosystem. One of the players that led the charge back home was Mindgrove Technologies. The IIT Madras-incubated fabless semiconductor company proved to be a testament to India's semiconductor ambitions as it debuted India's first commercial high-performance SoC (system on chip) called Secure IoT. The chip is designed on open-source instruction set architecture (ISA) RISC-V and is expected to improve cost efficiency for Indian original equipment manufacturers (OEMs) for their devices such as smartwatches, smart city devices, connected home devices, EV battery management systems, among others. Founded in 2021 by Shashwath TR and Sharan Srinivas Jagathrakshakan, Mindgrove caters to the wide gap between high-end and low-end players in the embedded systems space and uses indigenous RISC-V Shakti cores to power its chips. And investors found merit in its offerings too as the startup raised a hefty $8 Mn in funding towards the end of 2024 to fuel its in-house engineering capabilities and accelerate production and sales of its first chip.

Big AI bets, demand reboot: Indian IT sector 'bytes' into 2025 with cautious optimism

The Indian IT industry expects better tech spending and a stronger deal pipeline as businesses have started onboarding AI. Experts also expect strong tech M&A activity in 2025, with big data, cloud, and Generative AI driving acquisitions. Tech startups are also getting ready for their market debut, aiming to capitalize on the highs of the IPO market in 2024.The Indian IT industry steps into 2025 with hope and optimism of improved tech spending and stronger deal pipeline as businesses across-the-board take bold AI bets, but all eyes are on global macroeconomic cues as well as the US' stance on trade and high-skilled immigration as president-elect Donald Trump returns to White House next month. With Q2 report card of most IT heavyweights fuelling hopes of an improved client demand over the coming quarters - industry pundits predict a notable rebound in growth and profitability metrics materialising by late 2025 or the second half of FY26, if all goes well. Experts also expect tech M&A counters to buzz right through 2025, with big data, cloud and Gen AI (Generative AI) acting as major draws for companies with takeover appetites. Meanwhile, the IPO market - heady from 2024 highs - seems all primed up for yet another blockbuster year as a slew of tech startups are readying for a market debut to capitalise on euphoria. Sindhu Gangadharan, chairperson of IT industry association Nasscom says a full rebound in tech and discretionary spending is projected by late 2025, provided global macroeconomic conditions stabilise and geopolitical tensions ease. "The year 2024 witnessed a steady but uneven recovery in demand for tech services, with strong growth in areas like AI, cloud computing, and cybersecurity. Companies are increasingly prioritising investments in these transformative technologies to enhance efficiency and resilience," says Gangadharan, who took charge at the helm of Nasscom this year. After creating a stir in 2024, Generative AI is now at a "transformative inflection point" and poised to redefine industries and fuel global innovation. While tech sector is broadening its services to include GenAI-powered analytics, intelligent automation, and personalised customer experiences, the non-tech sectors are expected to face significant disruption, with GenAI transforming marketing, operations, R&D and other operations. Businesses, says Gangadharan, are likely to prioritise investments in cloud migration, AI/ML (Artificial Intelligence and Machine Learning) applications, as well as cybersecurity solutions as they plan for a resilient and future-ready infrastructure. Companies too are scaling up hiring in areas of AI skills, machine learning, generative AI (GenAI), and cybersecurity as these technologies become core to digital transformation strategies. Puneet Chandok, President of Microsoft India and South Asia sees a robust demand for specialised roles in AI, data science, and cybersecurity, within the Indian IT services and tech domains. "The focus will be on upskilling and reskilling the workforce to meet evolving technological demands. We will also see a significant rise in talent and opportunities within Tier 2 cities, reflecting a broader geographic distribution of tech talent," he observes. Gangadharan believes that 2025 will be all about accelerated tech adoption, increased IT budgets, continued recovery in BFSI, retail, and healthcare verticals among others. Cloud migration and AI solutions will drive larger deal pipelines, positively impacting profitability, she said. While the order book/revenue contribution from Gen-AI deals so far is limited, it is likely to pick up over the medium term as overall technology adoption becomes more pervasive, Deepak Jotwani, Vice President and Sector Head, Corporate Ratings at ICRA said. While some green shoots have been sprouting in recent quarters, a marked recovery is expected by second half of FY2026, Jotwani further said, adding sectors such as BFSI have seen some recovery in past months but manufacturing and retail are yet to pick up pace. Akhilesh Tuteja, Partner and Head, Clients and Markets at KPMG in India is of the view that discretionary spends in tech could begin returning "more robustly" by late 2025 as global companies stabilise growth and invest in digital capabilities. For now, the management commentary remains cautiously optimistic for the export-led tech industry (Infosys and HCLTech raised sales forecast for FY25), and back home a sensational year of IPOs has ensured that scores of start-ups and digital businesses are queueing up for listing next year, to take advantage of extraordinary market rally. Following in the footsteps of Swiggy and FirstCry, startups such as Zepto, Bluestone, Ecom Express, PhysicsWallah, InCred Finance, Ola (mobility), PayU, Ather, boAt, Pine Labs, are reportedly eyeing a public issue. "The (IPO) momentum is likely to sustain given the continued buoyancy in the Indian capital markets," notes Jotwani. After being in the grip of harsh and prolonged funding winter, startup space saw some pick-up deal momentum. "The funding scenario in 2025 is likely to be better than 2024. Investors will be cautiously optimistic and will continue to focus on due diligence, favour sustainable business models and innovation, especially targeting underpenetrated markets," Atul Monga, CEO and cofounder of Basic Home Loan says. The year logged its fair share of controversies - founders engaged in open and public spats (Ola founder Bhavish Aggarwal Vs comedian Kunal Kamra), faced backlash over their endorsement of long work hours (Infosys founder N R Narayana Murthy, Indian-origin CEO of AI startup Greptile, Daksh Gupta) and became the target of online hate over social media posts on unrealistic workplace expectations. The tech space presented picture of contrasts, oscillating between rapid highs and sudden lows. Quick-commerce companies surged ahead competing for dominance, while the likes of Paytm and Byju's - once posterboys of Indian startup ecosystem - struggled to navigate challenges on multiple fronts. As quick commerce companies Zepto and Blinkit reshaped consumer habits and redefined ecommerce landscape, some established players embraced rapid delivery models. Flipkart forayed into quick commerce with 'Minutes' and Amazon is launching 15-minute deliveries starting in Bengaluru. Year 2024 saw the tech sector walk the delicate balance between innovation and survival. Social media platform Koo, which had pitched itself as a rival and viable alternative to Twitter (now X) shut down with cofounders penning a heartfelt note about tough decisions and little yellow bird bidding adieu, and cryptocurrency platform WazirX's became the epicentre of a USD 230 million crypto heist that exposed the fragile nature of tech infrastructure. Indian startups took on the might of tech world goliaths like Google, who also came under increased scrutiny from competition watchdog. Earlier this year, founders of prominent Indian startups called out Google for removing many desi apps from Playstore over disagreements on US tech major's billing policy, and the acrimonious faceoff ended when Google restored the apps back following the Indian Government's intervention. Competition Commission (CCI) stepped up the heat on big tech firms, including Amazon, Flipkart, Meta, and Apple. India's antitrust watchdog slapped a penalty of Rs 213.14 crore on social media giant Meta for unfair business ways with respect to WhatsApp privacy policy update done in 2021. The Commission also issued cease-and-desist directions and directed Meta and WhatsApp to implement certain behavioural remedies within a defined timeline. "The regulatory developments in 2024 have been encouraging, particularly in how regulators have approached the industry's broader perspective. We anticipate the regulatory landscape in India to become more intense in 2025," Alliance of Digital India Foundation (ADIF) noted.

Best of 2024: AIM Editor's Top Picks

We're deeply grateful for the opportunity to inform, inspire, and connect a community passionate about AI. It's been a whirlwind year for AI and an even busier one for us at AIM Media House. From breaking industry-shaking updates to shaping the conversations that define the future, we have been at the heart of it all. Over the past year, we published 3,343+ stories -- interviews, deep dives, and reports. These stories weren't just articles; they sparked global debates, celebrated innovation, and challenged the status quo. We're deeply grateful for the opportunity to inform, inspire, and connect a community passionate about AI and are proud to bring you the Editor's Picks for 2024 -- a curated selection of the year's most impactful stories. Let's dive in. Meta's Llama models are changing India's tech landscape, empowering small developers and streamlining enterprise solutions. With endorsements from figures like Mukesh Ambani, Llama has become a foundational tool in India's generative AI ecosystem. Whether it's helping farmers with KissanAI, enhancing customer service for Indian Railways, or aiding fact-checking with Sach AI, Llama is making AI accessible and impactful. Why read this? Open-Source Llama isn't just changing AI -- it's driving a technological transformation across India. NVIDIA's CUDA reigns supreme in the AI world, powering 95% of the GPU programming market with its vast ecosystem and unmatched performance. However, AMD's ROCm is stepping up as a challenger, offering open-source flexibility, strong ties to frameworks like PyTorch, and cost-effective alternatives for developers. With partnerships like Triton's integration and new MI325X accelerators, AMD is positioning ROCm as a serious contender. Why read this? The battle between CUDA and ROCm could reshape the AI hardware landscape and change how we build the future. Once synonymous with mobile phones, Nokia is making waves again -- this time by transforming networking for the AI age. With partnerships like NVIDIA for AI-powered Cloud RAN and Qualcomm for seamless multi-vendor AI interoperability, Nokia is building the infrastructure to support next-gen technologies. From private 5G networks with Dell to AI-driven solutions with Google, Nokia's focus is clear: simplified, automated, and scalable networks for industries worldwide. Why read this? Nokia's AI-powered revival is a masterclass in reinvention -- proof that even legacy giants can lead the future of connectivity. Big names like Salesforce and Workday are feeling the heat as companies like Klarna ditch traditional software for in-house AI solutions. Why? AI tools are making it cheaper and easier to create custom solutions that fit perfectly instead of relying on one-size-fits-all software. From universities to startups, everyone's rethinking their approach -- choosing flexibility and long-term savings over pricey subscriptions. This shift is forcing SaaS companies to evolve fast or risk becoming obsolete. Why read this? The way businesses run is changing fast, and this story reveals what's coming next. From Eric Schmidt to Elon Musk, industry leaders are largely opposed to remote work, blaming it for stifling innovation and productivity. CEOs like Amazon's Andy Jassy and OpenAI's Sam Altman insist that in-person collaboration drives breakthroughs. Yet, with traffic snarls in cities like Bengaluru and employee protests, the return-to-office mandate has sparked backlash. As companies try hybrid models, the question remains: Is the era of remote work truly over, or is this just another chapter in workplace evolution? Why read this? This decides the future of work, and it's a conversation every professional needs to be part of. Why hire a consultant when AI can do the job? With tools like ChatGPT and SurveySensum, anyone can now analyse customer feedback, track trends, and generate actionable insights -- all in real time and at a fraction of the cost. From automotive touchpoints to telecom retention strategies, AI is transforming how businesses understand and engage with customers. SurveySensum's AI engine even automates feedback summaries in multiple languages, slashing costs by up to 80%. Why read this? The future of market research is here. It's fast, efficient, and powered by AI -- you don't want to miss this shift. AI is breathing new life into 5G with innovations, thanks to NVIDIA and SoftBank's AITRAS network, seamlessly integrating AI into telecom. As 5G faces competition from technologies like Elon Musk's Starlink and the rise of quantum networking, its role in tomorrow's connectivity remains uncertain. Why read this? The networks of the future are being built today. https://youtu.be/M1MggziHOE4 Pragya Misra, OpenAI's trailblazer in India, is no ordinary hire. From being WhatsApp's first employee in India to representing the country as one of its top amateur golfers, Misra's journey is a masterclass in versatility and determination. Now leading public policy and partnerships for OpenAI in India, Misra's passion for India's potential shines through, making her the perfect bridge between OpenAI's global mission and India's grassroots innovation. Why read this? Misra's inspiring story is shaping the future of AI in a country poised to lead the world. Prafulla Dhariwal, a child prodigy from Pune, has taken the tech world by storm as a key contributor to OpenAI's groundbreaking GPT-4o model. Known for its all-in-one capabilities in text, vision, and audio, GPT-4o is already being hailed as a game-changer. But behind the magic is Dhariwal's extraordinary journey -- from designing websites at 11 and earning global accolades in science and math Olympiads to shaping the future of AI at OpenAI. His story is one of brilliance, determination, and the power of dreaming big. Why read this? Stories of exceptional talent like Dhariwal remind us of what's possible -- and inspire us to think bigger. Logan Kilpatrick, once known as Logan GPT, made headlines when he transitioned from OpenAI to Google on April Fool's Day, 2024. Now at Google, he's diving deep into the development of the Gemini AI models with legends like Jeff Dean and Demis Hassabis. In his words, it's like "going back to the roots" of a small, dynamic startup within the tech giant. With Google ramping up AI innovation to stay ahead in the race, Kilpatrick is at the heart of making products that could redefine AI's role in our lives. Why read this? Kilpatrick's story reveals the passion and power driving today's AI revolution, where the best minds in tech are shaping the tools of tomorrow. Veezhinathan Kamakoti, the mastermind behind India's first microprocessor, SHAKTI, has dedicated the past decade to building India's semiconductor ecosystem. From mentoring startups like Incore and Chakra Electronics to leading cutting-edge AI initiatives like BharatGPT, Kamakoti is a force driving India toward technological independence. His SHAKTI project isn't just about processors -- it's about empowering startups, building trust in Indian hardware, and creating AI solutions tailored for every sector, from agriculture to medicine. Why read this? Kamakoti's journey is shaping a future where India stands tall in global tech -- and his vision is just getting started. https://youtu.be/7rdaTtz4ldo Paras Chopra, founder of Wingify and author of the blog Inverted Passion, has embarked on a bold new journey with his latest venture, Turing's Dream. This six-week residency program is a haven for AI enthusiasts building groundbreaking projects like noise-cancellation devices and graph neural networks for fraud detection -- minus the flashy startup buzz. Chopra's focus isn't on building companies; it's on fostering curiosity and pushing the boundaries of AI reasoning, creativity, and ethics. Why read this? Chopra reminds us that curiosity, not just commerce, drives true innovation in AI. With a mission to bring AI to the grassroots, Tanuj Bhojwani's People+ai is tackling India's unique challenges head-on. Backed by the visionaries behind the EkStep Foundation, this initiative focuses on frugal, scalable AI solutions tailored to India's diversity -- think Indic language models, rural accessibility, and affordable compute infrastructure. Bhojwani believes India's vast population and cultural complexity make it the perfect testbed for creating AI use cases that can transform lives, from healthcare to education. Why read this? People+ai isn't just building AI for India; it's setting the stage for a global AI revolution driven by real-world impact. Zerodha co-founder Nikhil Kamath is challenging startup mentorship with his Innovators Under 25 initiative and WTFund. Offering non-equity grants of up to INR 20 lakh, Kamath empowers young founders to tackle real-world problems across sectors like AI, healthcare, and sustainability -- without any take in their companies. From AI-powered toys and cancer detection tools to sustainable DNA storage, the program showcases India's brightest minds creating impact-driven startups. Why read this? Kamath's approach is a fresh take on nurturing innovation -- proof that investing in talent (not just equity) can transform industries. Kailash Nadh, CTO of Zerodha, has switched from Google Search to AI chatbots like ChatGPT, claiming they save him hours by delivering direct, actionable answers to technical queries. Nadh predicts a shift from traditional search to AI-powered Q&A formats, with tools like Perplexity AI offering a preview of what's to come. However, he warns of a growing "garbage problem" in search, with AI-generated content and bots flooding the web. Nadh emphasises that innovation must address real problems, not chase hype. Why read this? Nadh captures the evolving role of AI in the way we access and interact with knowledge online. The conversation around AI in India is evolving into a tale of two nations: 'AI for India,' catering to urban, tech-savvy populations, and 'AI for Bharat,' designed for rural communities where intuitive, impactful technology is a necessity. From startups like Fasal and Hesa improving farming and local commerce in villages to urban giants like Reliance and Ola driving AI innovations, the landscape is as diverse as the country itself. While urban India thrives on cutting-edge advancements, the true transformative potential of AI lies in empowering rural Bharat, where innovations can directly impact millions. Why read this? Understanding AI's dual role in India highlights how technology can bridge the gap between two vastly different realities. Devin, an AI-powered software development tool priced at $500 per month, now surpasses the annual cost of hiring a junior developer in India. Promising efficiency gains like reducing project timelines by 12x and automating repetitive tasks, Devin has already impressed companies like Nubank and Ramp. However, critics argue it's only as good as a junior developer who is prone to errors and dependent on oversight. Why read this? AI tools like Devin are pushing the boundaries in software development, raising questions about cost, quality, and the evolving role of human coders. Generative AI tools like Cursor and Claude are reshaping the Indian IT landscape, threatening traditional roles while creating new efficiencies. Once a safe haven for maintenance and service jobs, the sector now faces mounting pressure as AI enables enterprises to build applications internally, reducing dependence on IT giants like TCS, Infosys, and Wipro. Why read this? The rise of generative AI isn't just about innovation; it's a wake-up call for Indian IT to evolve or risk irrelevance. India is positioning itself at the forefront of the AI revolution, and the big theme for 2025 is AI agents. These digital assistants are set to redefine productivity by learning our habits, analysing routines, and making our lives more efficient. Industry leaders like CP Gurnani and Redis VP Manvinder Singh are confident in India's potential to lead this charge, with Redis playing a key role in powering next-gen agentic AI through its cutting-edge tools like vector search and semantic caching. Why read this? India isn't just adopting AI, it's shaping the global future of AI agents. TWO, an Indian AI startup, is quietly reshaping the enterprise AI landscape with its powerful multilingual GenAI models, SUTRA and Sutra HiFi. Founded by Pranav Mistry, the company focuses on solving high-impact problems for large enterprises across India and APAC, boasting customers like Jio, Samsung SDS, and Shinhan Bank. With innovations in predictive AI and lightweight model architectures like 1-bit LLMs, TWO's approach prioritises scalability, cost efficiency, and localisation. Why read this? To discover how TWO is redefining enterprise adoption, proving that the next big AI breakthrough might just be homegrown. HSR Layout in Bengaluru is fast becoming the epicentre of India's AI revolution. With iconic buildings like Urban Vault housing a cluster of trailblazing AI startups, the neighbourhood is a vibrant ecosystem fostering innovation and collaboration. From GenAI startups like Factor.ai to medical diagnostics platform SigTuple and others, HSR Layout is a melting pot of diverse talent and groundbreaking ideas. Why read this? HSR Layout isn't just a neighbourhood; it's the heartbeat of Bengaluru's AI innovation. Kimberly-Clark, the brand behind Huggies and Kleenex, has made Bengaluru its global innovation hub -- and for a good reason. With a track record of AI-powered solutions like Maestro, which saved $20 million annually in logistics and stock management, the team is driving breakthroughs in marketing, e-commerce, and field operations. From custom tools like KC-GPT to route optimisation algorithms used worldwide, Bengaluru is shaping how Kimberly-Clark operates globally. Why read this? Bengaluru isn't just leading India's tech scene -- it's shaping global business strategies with cutting-edge AI. Cockroach Labs, creator of the resilient cloud-native CockroachDB, has deepened its roots in Bengaluru, leveraging the city's unmatched talent pool to drive its Asia-Pacific growth. Born from the challenges its founders faced at Google, CockroachDB's architecture eliminates vendor lock-in and supports seamless operations across clouds and data centres -- earning trust from giants like Netflix and startups like Fi. With plans to expand its Bengaluru office into a premier R&D hub, the company is also integrating AI-driven features like vector similarity searches, solidifying its role as a leader in scalable database solutions. Why read this? Cockroach Labs' story isn't just about databases -- it's about reimagining resilience and scalability for the AI era, with Bengaluru at its core.

Enter AI, Exit 'G': Freshworks After Girish Mathrubootham

In August 2024, Freshworks cofounder Girish Mathrubootham popularly known as 'G' said, "Five or six years ago, we asked our team a critical question: What could disrupt Freshworks? The answer was AI. That's when we began investing in Freddy AI. But the ChatGPT demo was a game-changer -- it revealed the immense potential of AI. AI is the future, and the world is on the brink of a massive transformation." It's hardly a secret that AI is being hailed as the biggest tech revolution since the internet -- and rightfully so. It has already transformed industry titans and our daily lives in profound ways. Tech giants like Google, Microsoft, Facebook, Apple, and Amazon have made AI the cornerstone of their product strategies, while the likes of OpenAI and Anthropic have become the new AI native giants of the world. More than any other sector, AI has transformed SaaS like no other inflection point before it -- the likes of Freshworks, Zoho and Salesforce risk embracing AI or fading into irrelevance if they fail to do so, as Mathrubootham hinted at. According to the Inc42 SaaS Report 2024, AI has significantly permeated the Indian SaaS landscape, with 85% of SaaS startups infusing AI into their products and services in some shape or form. The SaaS and GenAI sectors in India are poised to unlock market opportunities worth $70 Bn and $17 Bn, respectively, by 2030. But Freshworks, the AI revolution represents a paradigm shift -- not just from the point of view of product development and operation, but also when it comes to leadership. In fact, Freshworks' example is just one of the many ways in which AI is transforming software giants and a sign of things to come. It began in May 2024, when Mathrubootham announced his resignation as CEO, just a few weeks before he made that above claim in a podcast. The company's president Dennis Woodside has been named as his successor as Freshworks steps into the AI era. His departure marked the beginning of significant leadership changes at Freshworks. Since then, the company has seen a complete overhaul of its top management, including the chief technology officer (CTO), chief product officer (CPO), chief revenue officer (CRO), and even the India head. Simply speaking, by the end of 2024, Freshworks is no longer the same company it was one year ago. Mathrubootham has transitioned into the role of executive chairman at Freshworks, but behind the scenes, everything is changing too. Speaking to Inc42, Shelton Rego, the new VP for sales in India, remarked, "I often compare AI to electricity -- it takes time to fully integrate and show its impact across applications. Girish foresaw this as early as 2019, laying the groundwork long before AI became a buzzword. Today, we're already seeing tangible value for customers across employee experience (EX), customer experience (CX), and AI. These three pillars will continue to shape our strategy for the next two to three years, with substantial innovation happening in both EX and CX." Freshworks In The Post-G Era Beyond leadership changes, AI has resulted in a restructuring of the India business. A senior employee revealed that Freshworks recently laid off 660 employees from its nearly 5,000-strong workforce. This rejig has particularly impacted the India operations, and positions the company to execute much of the AI-led transformation, the employee noted. Before the layoffs, around 4,100 of Freshworks' employees were based in India (as of December 2023), making it the company's largest operations hub."India is our biggest contributor on the supply side, while the US, home to our headquarters, drives demand," the senior employee added. Indeed, North America accounts for over 55% of Freshworks' revenue, underscoring the importance of the US market. However, the Indian and US entities are dual engines that Freshworks needs for growth. With AI coming into the picture, the focus for Freshworks is efficiency on the supply side to maximise the outcomes on the demand side. This was the sentiment behind Mathrubootham stepping down in some ways. "If I wanted, I could have held onto the CEO title at Freshworks. But the question is: where can I add the most value? Long-term, true long-term value. Investors often ask about the market perception of Freshworks -- whether AI will impact or whether AI will disrupt customer service. That's been the talk of the town. We've been working on this for five years," he said in the same podcast mentioned above. Citing the Java wave and the SaaS waves of the past, Mathrubootham claimed that the AI wave is truly a monster wave, and that he's excited about riding this one, just like Freshworks did in the past. Rego, who was appointed as VP in September 2024, expanded on this notion, "For the last 40 years humans needed to learn machine languages such as Java, C and so on, to understand machines. Now, machines understand human languages. Machines can understand our feelings, when we are happy or sad. So, now humans don't have to change." But does it mean Freshworks has to change to become an AI-first company? AI Or SaaS: Freshworks' Future? Rego claims that Freshworks does not see itself as an AI company, but one that uses AI in applications to help its customers. "In fact, our mission is to provide AI-first software which is easy to use. So, focus is definitely on AI but we are still a software company," he told Inc42. The focus is on innovation and development in the SaaS application layer to drive meaningful value for its customers. He added that AI is already being practically implemented at enterprise customers that Freshworks caters to. Here's an example that he cited: With the help of GenAI, Freshworks' conversation summarisation function helped clients reduce turnaround time by 57%, thanks to actionable insights and recommendations. Indeed, the application layer has emerged as the most accessible way for consumers to adopt AI effectively, so that's where Freshworks' current focus is, and that of its competitors, even though some have looked to get into the infrastructure layer as well. Like Zoho, India's largest SaaS company, which is developing its own LLMs. Once the LLMs are built and deployed, they will be available to Zoho's 700K customers across ManageEngine and Zoho.com globally. Is Freshworks also building its own LLMs in order to complete the AI stack? Rego neither confirmed nor denied it, but said that there are numerous large language models (LLMs) available today, and Freshworks does not intend to limit customers to just one or two options. The company's goal is to offer a wide array of services that enable customers to achieve their objectives seamlessly. While Freshworks has not commented on whether it is developing its own LLM, the organization actively leverages existing LLMs to power Freddy AI, its AI-driven platform. Freddy's core functionalities -- such as the AI agent, co-pilot, and insights -- are built on these LLMs, which serve as the foundation for its advanced capabilities. "When it comes to the approach we adopt for different industry segments, we follow a clear, tiered strategy. For smaller businesses and digital-first customers, we offer a seamless onboarding experience through our website, enabling them to quickly adopt our services independently. On the other hand, we dedicate significant efforts to serving larger conglomerates -- like the Tata Group, Mahindra Group, and Godrej Group -- that require comprehensive, enterprise-grade solutions," the VP explained. Freshworks' focus in India will be on large-scale enterprises and conglomerates BFSI, media and traditional manufacturing sectors. Rego believes that these are the sectors that have been integral to Freshworks' growth in India, which are also seeking the productivity and efficiency boost that AI brings. Will AI Change India SaaS Adoption? But is generative AI the solution to all SaaS challenges? Not quite. In fact, in India, the impact of AI on SaaS revenue is yet to be clearly ascertained. These are still early days and even those adopting AI-infused SaaS are doing so cautiously. According to various reports, despite a brief resurgence in industry revenue in 2021, median revenue growth rates for public SaaS companies returned to a decade-long downward trend. In 2023, 42% of SaaS companies reported a decline in ARPU (average revenue per user), while 8.2% saw a drop in ACV (annual contract value). As of October, 2024, B2B SaaS growth fell to 3.1% CAGR, while B2C growth dropped to 3.3% CAGR Even Freshworks, an early adopter of AI, has not been immune to these pressures. Despite promising early results from its latest innovations, 2024 has proven to be a difficult year for the company. Following its Q1 2024 earnings call in May, Freshworks shares dropped by 27%, and while in Q3 2024 losses shrank to $29 Mn on a YoY basis, this was still higher than the previous quarter. The sharp decline was attributed to several major developments, including the announcement of a CEO transition, the acquisition of agentless IT solutions company Device42, and a downward revision of the company's revenue guidance for the year. However, infusing AI into SaaS products does not come cheap. Gartner estimates that organisations may spend between $5 Mn and $20 Mn on embedding or customising AI models, or building GenAI applications for their products. While Rego didn't comment on the financials and the timeline pertaining to the path to profitability, the India VP added that currently the Indian market is ripe for SaaS innovation, as a whole lot of new customers will be using AI for the first time. Like the pandemic four years ago, there is another digital transformation wave afoot, but this time, businesses are waking up to how deeply transformative AI is as opposed to just adopting SaaS. As Rego added, "For us, the big challenge would be helping our customers with the transformation and this is not going to be easy."