Sarvam AI becomes unicorn after raising $234M as India doubles down on home-grown AI

Bengaluru-based artificial intelligence startup Sarvam AI has raised $234 million in the first close of its Series B funding round, marking one of the largest funding rounds for an Indian AI company to date.

The investment values the company at $1.5 billion and is led by HCLTech, one of India’s largest technology services firms, alongside global venture capital investor Bessemer Venture Partners. Existing backers Khosla Ventures and Peak XV Partners also participated in the round.

The funding comes at a time when India is seeking to strengthen its domestic AI capabilities amid a global race to build advanced AI systems.

Sarvam AI, founded in 2023 by Vivek Raghavan and Pratyush Kumar, has emerged as one of the country’s most prominent AI startups by focusing on large language models (LLMs), speech technologies, and AI infrastructure tailored for Indian languages and use cases.

The company said it plans to use the fresh capital to train its next generation of frontier AI models, expand research in agentic AI, coding and cybersecurity systems, scale computing infrastructure and accelerate deployments across enterprises and government organisations.

The investment also shows growing confidence among large Indian enterprises in the commercial potential of AI. HCLTech’s participation is particularly significant because it combines a major technology services company with a startup developing foundational AI technologies.

According to the company, the partnership aims to bring together Sarvam’s AI models and infrastructure with HCLTech’s engineering expertise and enterprise customer base.

Sarvam co-founder Raghavan said the company’s objective is building AI that serves India’s needs at scale. He added the latest investment would help the company accelerate its efforts to create world-class AI capabilities from India while addressing local requirements.

The emphasis on local requirements has been central to Sarvam’s strategy since its inception. Unlike many global AI companies that primarily develop models optimised for English, Sarvam focuses heavily on Indian languages and voice-based interactions. This is particularly relevant in a country where hundreds of millions of people prefer regional languages and where voice remains a more natural interface than text for many users.

Raghavan previously worked on India’s digital public infrastructure initiatives such as Aadhaar, while Kumar, a prominent AI researcher associated with AI4Bharat, a project focused on Indian language technologies. 

Their backgrounds combined expertise in large-scale public digital systems and advanced AI research, helping position the startup at the intersection of technology innovation and public utility.

Sarvam’s ambitions extend beyond building chatbots or consumer applications. The company is pursuing a full-stack AI approach. This means developing the underlying models, training infrastructure, deployment platforms and end-user applications rather than focusing on a single layer of the technology stack.

The company highlighted several operational milestones during its announcement. It noted its systems currently handle more than 2 million conversations every day and process over 10 million API calls daily. Sarvam has also digitised more than 35 million pages and transcribed over 500,000 hours of audio every month.

The startup pointed to several large-scale deployments as evidence of commercial traction. These include collecting data from 17 million farmers for India’s Ministry of Agriculture and supporting outreach efforts involving 45 million insurance policyholders through AI-powered voice systems.

Such deployments highlight an increasingly important trend within India’s AI sector. While much global attention remains focused on consumer-facing chatbots, Indian startups are often finding opportunities in enterprise software, government services and language technologies that address specific local challenges.

Sovereign AI push

The funding announcement also comes amid growing interest in the concept of sovereign AI, which is essentially a country’s ability to develop and control critical AI technologies, data and computing infrastructure rather than relying entirely on foreign providers.

India has been actively pursuing this objective through the IndiaAI Mission, a government initiative aimed at strengthening domestic AI research, infrastructure and innovation. Earlier, Sarvam was selected as one of the companies involved in India’s efforts to build indigenous foundational AI models, reinforcing its position within the country’s emerging AI ecosystem.

The broader AI sector has witnessed a surge in investment over the past two years. Globally, companies developing large language models have attracted billions of dollars as businesses and governments seek to harness generative AI technologies.

At the same time, competition in the sector is intensifying. Global technology companies such as OpenAI, Google, Anthropic and Meta continue to invest heavily in increasingly capable AI models. Chinese firms including DeepSeek have also emerged as influential players by demonstrating that powerful AI systems can be developed at lower costs than previously believed.

The company’s growth has been rapid. In late 2023, shortly after its launch, Sarvam raised $41 million from investors including Lightspeed Venture Partners, Peak XV Partners and Khosla Ventures. Less than three years later, it has reached a valuation of $1.5 billion.