India’s GenAI Funding Sees Strong Revival in Q2FY2025

Nasscom Generative AI Tracker  Q2FY2025 

0
47

India has strengthened its position in the global Generative AI  (GenAI) landscape, ranking 6th among major economies in the share of GenAI startup  ecosystems. The country’s GenAI ecosystem has demonstrated strong and broad-based growth, with significant advancements in innovation, funding, and talent development. Since the first half  of 2024, innovative startups such as Nurix AI, Dashtoon, and Mihup have led the way with  transformative solutions in workflow management, digital comic creation, and conversational  analytics for contact centers. To capture the rapidly shifting GenAI startup landscape, Nasscom has released the key findings from its Generative AI Tracker: Tech Industry Activity in  Q2FY2025.  

The report highlights a 6X quarter-on-quarter (q-o-q) surge in investments, fuelled primarily by  B2B platforms and productivity solutions. Funding activity gained significant momentum in  Q2FY2025, with a record 20 funding rounds, marking a strong recovery after a sluggish Q1. 

Key Findings from the Report 

1. Funding Rebound Led by Applications and Services 

Total funding grew 3.4X year-on-year, led by investments in enterprise  applications and Agentic AI. 

Funding rounds grew by 3X in Q2 of FY2025, with early-stage investments  accounting for 77% of all rounds, including angel and seed funding. 

2. Sustained Growth in Tech Providers’ GenAI Activities, led by a strong uptick in  product and go-to-market partnerships 

Providers shifted from building use case portfolios to converting active PoCs into  production-ready solutions. 

Partnerships surged by 25% q-o-q, focusing on product enhancements, joint go to-market strategies, and government-led skilling initiatives. 

Active PoCs and production use cases boosted the GenAI revenue pipeline, with  stronger realizations reported. 

3. Shift to Advanced AI Skilling and Thematic Upskilling 

Talent strategies transitioned from basic AI literacy to advanced and thematic  upskilling, emphasizing platform integration and agentic AI capabilities. 

The increasing maturity of the Indian GenAI ecosystem reflects its transition from exploratory use  cases to scalable, production-ready solutions. This growth is fuelled by improving funding  inflows, rising revenue realizations, and expanding applications in enterprise productivity and  customer engagement. 

Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, stated: “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.”