Generative AI Startups Gain Momentum In Investment Landscape

In the ever-evolving landscape of artificial intelligence (AI), a paradigm shift is underway as generative AI, once considered distant from creative domains, gains traction. This emerging field is revolutionising industries by creating new material rather than solely analysing existing content, thanks to models trained on vast datasets of text, images, audio, and video.

Speaking at a panel discussion at the BW Businessworld Gen AI Summit, Deepak Sharma, Co-Founder & Managing Partner of India Accelerator, emphasised the significance of generative AI, labelling it as the next wave of digital revolution. "Generative AI is sweeping the world," Sharma remarked. "For generative AI-specific startups, we have laid out benchmarks, principles, and frameworks which we leverage, including the 4 T framework and the 3R risk framework."

When questioned about the key founder traits that inspire confidence for investing in AI startups, Kapil Kotnala, Vice President of Investments at Mumbai Angels, stressed the pivotal role of founders in the valuation process. "Any startup that comes to us for valuation, a high percentage is given to the founder traits, because at the end of the day, it is the founders that we are betting on," Kotnala affirmed. "So, some of the traits we look for include their technical expertise in generative AI and their ability to build the product."

The conversation underscores a growing trend in the investment community where the focus is shifting towards backing founders who demonstrate a deep understanding of emerging technologies like generative AI. Investors are increasingly recognizing the importance of founder traits such as technical proficiency, vision, and adaptability in driving the success of AI startups.

As generative AI continues to disrupt traditional paradigms across various sectors, startups equipped with innovative solutions are poised to attract substantial investment and reshape industries in profound ways. With frameworks and principles in place to evaluate and support these ventures, investors are positioning themselves to capitalise on the transformative potential of generative AI technologies.