Tech3 | SaaS startups raise AI budgets amid slow hiring; Fireside Ventures’ new fund; and more

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In today’s newsletter:

• SaaS startups spend on AI, scrimp on hiring 
• Fireside eyes $230 mn fourth fund
• Meity cracks down on Chinese CCTVs

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SaaS startups are hitting pause on large-scale hiring and redirecting budgets into AI tools—from copilots to internal agents—hoping to unlock productivity without bloating headcount.

“We’re rethinking how we work…It’s not fewer people just to cut costs, it’s about designing orgs around people + AI,” says Arvind Parthiban of SuperOps.  

Others, like Atomicwork, call it the “Uber AI Mode”—investing 20% of hiring budgets into AI that delivers returns within a year.

Founders argue that AI now offers a better ROI than hiring more employees. Investors are backing this shift too.

“AI tools cost $20–$40 per person per month,” says Upekkha’s Prasanna Krishnamoorthy. “Hiring adds friction. AI adds velocity.”  

Startups are now reserving 10–20% of their software budgets just for AI experiments, aiming for higher revenue per employee, greater margins, and future-proof organisations.

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Fireside Ventures’ Fund IV stays the course at $230 million, but with a sharper international edge.

• The fund size remains relatively unchanged from its 2022 iteration, signalling a strategic, measured approach

While domestic LPs remain core, Fireside is now actively courting global backers looking to tap into India’s consumption boom.

• The fund has applied for SEBI registration and is currently in active conversations with both existing and potential LPs

Since its launch in 2017, the Bengaluru-based VC firm has backed 53 brands, including Yoga Bar, The Sleep Company, and The Whole Truth, and now manages assets worth over Rs 3,000 crore.

Fireside joins a growing list of firms raising fresh capital amid a surge in dry powder and renewed investor interest.

While A91 and Bessemer have increased their fund sizes, Fireside and Accel have opted for consistency. 

• VC insiders say that maintaining steady fund sizes may be the smarter play amid rising return expectations and tougher exit paths

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On April 21, the Ministry of Electronics and Information Technology (MeitY) refused to grant any further deadline extensions for obtaining certification from the Standardisation Testing and Quality Certification for CCTV components.

• The certification norms were introduced to ensure the cybersecurity of these products and maintain a trusted supply chain
• Certification is now mandatory not only for participation in government tenders but also for general market sales

Experts say over 80% of CCTV products in India rely on Chinese components. While countries like the US have banned the use of Chinese CCTVs, India has taken a unique approach by requiring certification for such items.

• Telecom Equipment Manufacturers’ Association of India (TEMA) backed the move, calling it critical for national security

The Federation of All India IT Associations (FAIITA) has warned that more than 1,000 MSMEs and around 4 lakh jobs could be at risk.

• Certification requires vendors to own the source code—effectively cutting out many Chinese-sourced products

Analysts say the shift opens up opportunities for non-Chinese chipmakers like Realtek and Novatek to expand in India.

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