India saw growth in the number of Gen AI startups during the first half of 2024. It increased from 66+ in H1CY2023 to 240+ in H1CY2025. This growth is largely responsible for the excessive growth of pivoted Gen AI startups. Let’s first see how we can classify native Gen AI startups and pivoted Gen AI startups.
Main characteristics of Native Gen AI startups
- Creation after ChatGPT 3.5 of OpenAI in November 2022: Native Gen AI startups are counted as those started after the first commercial launch of a Gen AI model
- Bootstrapped beginnings: 70% of native Gen AI startups were created without external funding, the rest came from incubators or venture capital studios.
- Success markers for natives:
- Get started with an innovative market-driven use case
- Moat lies in access to exclusive and proprietary data sources
- Technically skilled founders capable of building inexpensive, scalable Gen AI tools
Main characteristics of pivoted startups:
- Pivoted Gen AI startups are typically created before 2023
- According to India’s Gen AI Startup Landscape 2024, 47% of pivoted startups were launched as AI-native startups and subsequently integrated Gen AI into their solutions.
- According to India’s Gen AI Startup Landscape 2024, 81% of pivoted startups operate in the Applications layer.
The number of Pivoted Gen AI startups has grown 6x since the first half of 2023. There are several reasons behind the rise of pivoted startups.
- Transition from the era of automation to the era of autonomy: Startups have moved from simply automating tasks to creating autonomous systems capable of making decisions and self-improvement.
- Low-cost accessibility of fundamental models: Reducing costs and increasing availability of foundational AI models have democratized advanced AI capabilities for startups.
- The AI generation has created a blue ocean for markets with potential for cost optimization and increased revenue: Generative AI has opened up new, untapped markets where businesses can achieve both significant cost savings and revenue growth.
- Disrupted application-based use cases across multiple functions and industries: Generative AI has transformed traditional application models, enabling innovative solutions in sectors such as healthcare, finance and education.
Native startups increased from 48 to 127 from H12023 to H12024. Few reasons responsible for the growth of Gen AI native startups
- 17+ LLM with unique strengths and cost effectiveness.
- The government is proposing AI-specific infrastructure through AI Mission to India and investing in structured and unstructured datasets (Bhashini), including those in Indian languages, to make them publicly available.
- Early stage investor interest in Gen AI startups. This has encouraged many entrepreneurs to enter the generative AI space, thereby fostering the creation of new startups.
Top Funding Trends in Native and Pivoted Generation AI Startups:
- Native Gen AI startups continue to dominate the funding mix since the first half of 2023, albeit at half the growth rate of pivoted startups.
- In the first half of 2024, 70% of Generation AI’s native funding in the first half of 2024 was dedicated to modelers.
- 45% of net new funding since the first half of 2023 for pivoted startups has been dedicated to assistants or SaaS solutions, converted from predictive AI to text or voice.
AI Gen Assistants
- Pivoted Gen AI startups and industry-focused native apps see higher revenue: Mason and Muoro, native Gen AI retail technology startups declare income between $1 and $5 million, while Fluid AI, a pivoted Gen AI startup The provision of virtual assistants has generated more than $5 million in revenue since the first half of 2023.
Download the report to learn more: Gen AI Startup Landscape in India
Source: India Gen AI Startup Landscape Report 2024 (