Indian GenAI funding soars with 6X growth in Q2 FY25: Nasscom report
Funding rounds tripled in Q2 FY25, dominated by early-stage investments comprising angel and seed funding, which made up 77% of all rounds.
India has witnessed a sixfold increase in quarterly investments in Generative AI (GenAI) in Q2FY25, driven by growing interest in B2B platforms and productivity solutions. According to key findings from Nasscom’s ‘Generative AI Tracker: Tech Industry Activity in Q2FY2025’, funding activity surged in the period under review, recording 20 funding rounds and signaling a strong rebound from Q1.
Total funding during the quarter saw a 3.4X year-on-year growth, driven by strong investments in enterprise applications and Agentic AI. In Q2 FY25, funding rounds tripled, dominated by early-stage investments comprising angel and seed funding, making up 77% of all rounds.
“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,” said Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom.
The report further states that India has secured 6th position in the global GenAI landscape, mainly driven by innovation, funding, and talent development. Since early 2024, startups like Nurix AI, Dashtoon, and Mihup have led this momentum with solutions in workflow management, digital comic creation, and conversational analytics for contact centers.
Estimates suggest sustained growth in tech providers' GenAI activities, which was led by a shift from developing use case portfolios to transitioning active PoCs (proof of concepts) into production-ready solutions.
Partnerships have also witnessed a 25% quarter-on-quarter surge, focusing on product enhancements, collaborative go-to-market strategies, and government-led skilling initiatives.
Key findings also highlighted a shift toward advanced AI skilling and thematic upskilling. The report said that talent strategies have evolved from focusing on basic AI literacy to advanced, thematic upskilling, prioritising platform integration, and agentic AI capabilities.
Edited by Jyoti Narayan