In large enterprises, employees often struggle with internal workflows — be it tech glitches, onboarding hiccups, task delays, or a lack of timely support. These seemingly small problems can snowball into lost time and reduced productivity.

This is where there’s a growing need for smart, automated solutions that can take care of critical internal tasks quickly, efficiently and with minimal human involvement.

Founded in 2022 by Vijay Rayapati, Kiran Darisi and Parsuram Vijayasankar, Atomicwork is addressing this pain point of organisations by building AI-powered tools for enterprises. With its solutions, Atomicwork automates and streamlines internal workflows, reduces dependency on multiple platforms, and helps employees solve problems instantly.

Atomicwork’s endeavour is in sync with today’s enterprise needs — the ones related to exploring AI products, especially autonomous AI agents, to automate internal workflows like tech support, onboarding, task management, and more. 

According to a report, 33% of enterprise software applications will include agentic AI by 2028. Besides, at least 15% of daily work decisions would be made autonomously through agentic AI.

Atomicwork aims to capture a large portion of this growing market with its voice and vision AI agents for enterprise IT teams. 

Since its inception, it has raised $40 Mn to fund its technology development, hiring, and global customer acquisition. It is backed by marquee investors, including OpenAI-backed Khosla Ventures, Blume Ventures, Z47, and Peak XV.

Laying The First Bricks Of Atomicwork

While Rayapati is a second-time entrepreneur, who sold his previous startup Minjar to Nutanix in 2018, Darisi and Vijayasankar were part of the founding team at Freshworks. 

Having previously built software for developers and small and medium businesses, the trio joined hands to develop solutions that can help enterprises solve complex workflow challenges. This led to the creation of Atomicwork.

After its inception in 2022, the founders spent a year building a base platform. During this time, they were experimenting with AI and working on customer acquisition plans. In 2024, Atomicwork started full-fledged deployment of its platform with large enterprises.

“In any business, people use various tools and follow set processes to deliver a product or service. But along the way, they often face issues — usually due to lack of knowledge, insufficient training, or simply not reading the documentation. That’s where automation can step in and make a real difference,” the founders said.

Rayapati said Atomicwork solves this problem end-to-end for enterprises so that their businesses can operate much faster and they are not required to integrate 10 different tools to get basic help.

The startup has built an Agentic AI platform, Atom, which can be integrated with platforms like Microsoft Teams, Slack, Jira, Salesforce, Google Drive, and WordPress to ensure end-to-end problem-solving for enterprises and their employees.

As per Rayapati, Atomicwork is solely focussed on internal workflow challenges at enterprises because they are harder to solve than external and customer-facing issues.

Its Agentic AI platform includes tools such as AI Agents, AI Copilot, AI Skills, AI Search, AI Assistant, and AI Service Desk.

Though the founder did not reveal its total customer base, it serves some of the top global organisations across sectors such as financial services, healthcare, manufacturing, and education. Some of its top customers include Zuora, Pepper Money, and AMMEX.

Atomicwork’s Fusion Of AI Models

Atomicwork hasn’t built any proprietary large language models (LLMs). It rather does context engineering and distillation of the already available models to build small language models (SMLs) that can decide on the action based on specific use cases.

For instance, its AI agent with video capabilities is a combination of Google’s Gemini and OpenAI’s GPT models. Similarly, for chat support use cases, it has used a combination of Llama and OpenAI models. Atomicwork also uses Anthropic and Cohere for a few other use cases.

“We are building what people typically call, in technical language, an ensemble AI architecture, which is a fusion of AI models,” explained Rayapati.

The startup has developed its own proprietary datasets over the years, which it uses to train its AI models. 

The founder clarified that Atomicwork doesn’t do fine-tuning of models but rather prefers distillation, which is more cost-effective as GenAI models are changing almost every week.

As per a Google blog, fine-tuned models are usually better in predictions than the foundation LLMs, but they contain the same number of parameters as the foundation LLM. On the other hand, distillation creates a smaller version of an LLM, and the distilled LLM predicts much faster with fewer computational and environmental resources compared to the full LLM.

Atomicwork doesn’t customise its products and tools for every enterprise. While companies can choose to customise a bit as per their requirements, the platform doesn’t need a full customisation that SaaS products traditionally required.

It charges an enterprise with 1,000 employees an average amount of $100,000 per year. The startup began generating revenue in 2024. It has, however, refrained from sharing its earnings.

Forging Ahead Amid Global Competition

Going ahead, the founders want to create the next platform of choice for CIOs. They also want to expand their customer base from a few dozen customers right now to hundreds of customers soon. 

“We want to achieve our first $100 Mn revenue goal as soon as possible,” Rayapati said.

However, the competition is getting tougher. While the startup has its eye on beating ServiceNow, a cloud-based platform that helps businesses automate and manage workflows across various departments, the enterprise AI market is slowly seeing the emergence of many companies, big and small.

Even IT giants like Wipro, TCS and Amazon have built their own platforms. However, Rayapati believes that service companies can never become product companies even with AI.

Moreover, as AI adoption grows among Indian enterprises, Atomicwork sees a strong opportunity in the market. According to the founder, no one in India is currently building true enterprise-grade SaaS products.

“In India, Darwinbox is trying to build a true enterprise SaaS on the HR side, like we do for IT teams. I don’t think anybody else in the country is really targeting the global market building for the enterprises,” said Rayapati, urging Indian founders to target sectors dominated by legacy players.

“Go create AI native and AI at core software platforms. I think a massive opportunity is there, and that is how we create these billion-dollar revenue and tens of billions of dollars market cap companies. If you create simple use cases and applications… that kind of SaaS is dead,” Rayapati added.

As of now, while Atomicwork’s vision to become a CIO’s go-to platform sounds compelling, the path ahead is anything but straightforward. Enterprise software is a tough game. The challenge gets even steeper when you’re going up against global giants that have been around for decades. Amid this, can Atomicwork take on the big guns?  

[Edited By Shishir Parasher]

The post How Atomicwork Plans To Rewire Enterprise IT With Agentic AI appeared first on Inc42 Media.

If there is one area that GenAI has prominently impacted, it is customer experience and service. Harnessing the power of the generative capability of the large language models (LLMs), enterprises globally have onboarded AI-powered chatbots and virtual agents in droves.

And it is easy to see why. Well, AI chatbots can resolve tickets raised by customers 18% faster with a success rate of 71%. This simply means increased customer satisfaction and better conversion rates. 

However, while many companies are upgrading their customer care centres (contact centres), fears of job losses loom large, along with sub-par customer satisfaction. 

Understandably, there are several things that AI still cannot do. Besides, in a country like India, multiple languages remain a major hurdle for LLMs. As a result, a large number of tickets (complaints) still end up at the employee desk.

Many companies are now realising that they need to equip humans with smart AI agents to make their respective customer support and sales generation processes more efficient.

Bengaluru-based Observe.AI, too, is on a mission to automate complex tasks for human agents and make a difference in the way companies handle customer support.  

Founded in 2017, Observe.AI has enabled more than 350 enterprises to make their contact centres more efficient through its AI stack.

The startup was incorporated by Swapnil Jain, Akash Singh and Sharath Keshava Narayana. In 2018, Jithendra Vepa joined as the CTO and later became a cofounder. Singh and Narayana exited the company in 2022.

The Genesis Of Observe.AI

Speaking with Inc42, Jain, a former technical team lead at Twitter (now X), stated that when AI was still a grey area for many in 2016, he realised that speech technology and deep learning were at an inflexion point.  

“The machines’ ability to understand human speech was advancing rapidly, and I knew there was an opportunity to build something transformative in this space.” 

During this time, voice assistants were in their early days, but a big wave of this technology had already started. Google Assistant, Siri, Alexa, and a few other assistants were launched between 2010 and 2016. These tools use natural language processing (NLP) and mostly operate on simple command-based interactions.

To understand the application of the technology better, Jain spent six months in a contact centre based in the Philippines with hundreds of agents. Here, he realised that dedicated agents and QA analysts worked hard but were constrained by manual and time-consuming processes.

However, Vepa was involved in the research and development (R&D) of speech technology after his PhD at the University of Edinburgh. He was building text-to-speech systems at Samsung. 

Jain met Vepa about a year after starting the company. Back then, he was looking for an expert who could help him build the core technology and market for Observe.AI’s quality assurance (QA) products for contact centres. 

Initially onboarded as the chief scientist at Observe.AI, Vepa soon became the cofounder and CTO of the company.

With a gamut of challenges to be tackled across communication channels, including chat and email, the founders picked the hard problem first – voice. This led to the development of a conversational intelligence platform with a range of applications.

Since launching its first product, which focussed on analytics and manual QA support for contact centres, in 2019, the company has expanded its suite to build multiple products to improve contact centre performance with real-time insights, analysis, summarisation, and more. Its tech stack comprises tools such as Knowledge AI, Summarization AI, Auto Coaching, and Auto QA, among others.

Helped by the demand boom for speech and voice technologies during the pandemic, Observe.AI claims that its business grew more than 2X. It also acquired its first large customer, National Debt Relief, in 2020.

By then, Observe AI had already raised more than $30 Mn from Nexus Venture Partners, Y Combinator, and Scale Venture Partners. In 2020, it raised $54 Mn from Menlo Ventures. So far, the startup has raised $214 Mn in total funding. It is also backed by SoftBank.

While the founders did not reveal the revenue or growth multiples, the startup counts the likes of Pearson, Cox Automotive, Accolade, and DailyPay among its top customers. Largely catering to US customers across healthcare, BFSI, travel, and homecare sectors, Observe.AI has two customers in India. Besides, a majority of its tech team is based in the country.

What’s At The Core Of Observe.AI’s Tech

Today, Observe.AI’s technology supports enterprises with quality assurance, coaching and agent assistance. Besides, it provides valuable raw data to help businesses enhance their overall processes.

The startup claims to have delivered its enterprise clients with up to 60% efficiency gains and more than 75% reduction in quality evaluation time.

“We built our technology on genuine observation, seeing the human experience firsthand, then creating AI solutions that address real needs rather than theoretical problems,” said Jain.

When Observe.AI started building products for contact centres, especially for customer service, it recognised three areas that could be targeted. 

First, there was a necessity to analyse the conversations between agents and customers for compliance and quality. This analysis was devised to improve the agent performance for a better customer satisfaction score (CSAT) and to see more sales. 

The second area of focus was to help agents fetch information more effectively from large documents so that customer and agent conversations could be more efficient and shorter. With these in place, Observe.AI decided to bring in automation with voice agents, which it recently launched by leveraging the capabilities of GenAI and LLMs.

When Observe.AI began its journey, GenAI had yet to create waves. In its initial days, the startup began working with transformer models and building its robust data pipeline. 

“AI is in our DNA. From day one, Observe.AI started building strong foundations, whether it was model training or building the core technology or data pipeline. With the advent of GenAI, we have been quick to adapt,” the CTO said. 

There are two aspects to its core technology — speech-to-text, which involves automatic speech recognition, and LLMs that can then do reasoning and analyse the text. The company claims that its LLM is built on 40 Bn parameters.

Both of its core models, including the LLM, are built in-house. However, these models are not foundational. They are built on top of open-source foundational models and trained on domain-specific data.

“While we built these technologies, the only missing piece was a text-to-speech model, which communicates back again in a human-like speech quality. That’s where the recent acquisition of Dubdub.ai came into the picture. Now we have all these three technologies to build a strong voice AI platform,” said Vepa.

Observe.AI acquired Dubdub.ai for an undisclosed amount in March to tap into its text-to-speech technology, which works in over 50 languages, including a few Indic languages and enables users to produce audio output in over 20 voices, capturing diverse age groups, genders, along with a spectrum of emotions, such as angry, excited, and sad.

Observe.AI’s Next Leap

Although India makes up a small part of its current customer base, Vepa says the company plans to develop more products for this market. However, the major barrier to this is India’s language diversity.

Therefore, in spite of spending heavily on building such capabilities, Observe.AI is more interested in acquiring companies with expertise in Indic languages. The acquisition of Dubdub was one such step.

Meanwhile, competition is growing in the conversational AI space. In India, startups like CoRover and Gnani.ai have built their in-house models to bolster speech-to-text and text-to-speech models. Startups like NoBroker, Zomato, and OfBusiness, too, have also launched their AI agents to unclog customer-end bottlenecks.

Globally, Amazon and many others have also built such capabilities. However, Vepa believes that Observe.AI will continue to stand out because a majority in the industry are struggling with high latency and hallucinations.

According to Vepa, the biggest issue with today’s voicebots is endpoint detection. When two humans speak, one person knows when to start speaking after the other person stops. “But machines do not understand this. AI must learn when to speak after a human stops speaking — neither can it pause for too long nor should it barge in during a conversation

“Besides, we still need to figure out which conversations can be handled by the machine. Therefore, co-existence is the only way forward for now,” Vepa added.

He also believes that most emerging startups in the conversational AI space will need time to achieve the level of predictability, reliability, and consistency demanded by enterprise-grade services.

As a result, the founders see a huge market. In 2025, Observe.AI aims to double down on its voice AI agents so that enterprises can see better sales conversion and CSAT with human and AI agent collaborations. 

Besides, it also wants to acquire some large US businesses with high-volume contact centre needs. From here, it would be interesting to see how Observe.AI’s capabilities give it an edge over industry giants in the conversational AI space.

[Edited By Shishir Parasher]

The post How Observe.AI Is Redefining The Future Of Contact Centres appeared first on Inc42 Media.

Sustainability-focussed venture capital firm ZeCa Capital has received approval from the Securities and Exchange Board of India (SEBI) to launch its maiden fund with a corpus of INR 150 Cr.

Having already received commitments from a few LPs, including Atria Group chairman Sunder Raju and a few CXOs in the sustainability space, the VC firm is expected to announce the first close of the fund at about INR 40 Cr this month.

Floated last year by serial entrepreneur and investor (former partner at Venture Garage) Pawan Raj Kumar, along with ex-Cuemath executive Aakash Kushwaha and former RedSeer CFO Shreya Ravi, ZeCa Capital aims to invest in early-stage sustainable startups across electric mobility, renewable energies, agritech, circular economy, consumer brands, and SaaS sectors.

The fund, a Category II AIF, will invest in pre-seed and seed funding rounds of 20 to 25 startups in the next four years. The average ticket size will range between INR 2 Cr and INR 3 Cr.

“Our sweet spot is when a company is raising half a million to a million dollars at a valuation between $3 Mn to $6 Mn,” ZeCa Capital partner Kumar told Inc42. 

The VC firm made its first investment in sustainability-focussed SaaS platform, GreenStitch, earlier this year.

“We are placing only one big restriction on ourselves right now in terms of making investments. Unless a company is into deeptech, we want to see some customer love in the form of revenue and repeats to infuse capital there. We don’t want to fund research,” Kumar said on the investment criteria.

ZeCa Capital’s Sustainability Pathway

Talking about the idea behind launching the firm, Kumar said he wanted to start his own sector-focussed fund after being an investor for years. The recent developments in the sustainability space matched his personal inclination towards sustainable living, giving birth to ZeCa Capital, in which ‘ZeCa’ stands for Zero Carbon.

The VC firm has divided its investments into four buckets – technology, software, consumer, and circular economy. Under technology, it will invest in startups involved in building tech for electrification of transport, renewable energy, and agriculture. 

Even though funding EV startups is not anymore the top choice for most Indian VC firms, ZeCa Capital aims to invest in startups building efficient batteries and providing financing solutions. ZeCa Capital is currently evaluating a few fintech startups focussed on the EV space.

Given the nature of the sector, most of the investments by ZeCa Capital are expected to be in B2B startups, except for sustainable consumer brands, Kumar said.

Sustainability Driving Investments In Indian Startups 

As India aims to achieve its net-zero targets by 2070, sustainability and carbon neutrality have emerged as key themes in the country’s startup ecosystem. Within this, EV, solar energy and circular economy are among the subsectors that are abuzz with activities. 

This has given birth to several startups and even a few VC funds that are focussed solely on the sustainable space. 

For instance, Nikhil Kamath’s investment firm Gruhas and Bengaluru-based real estate major Brigade Group recently launched INR 300 Cr Earth Fund for investing in proptech and sustainability-focussed startups.

In October last year, Avaana Capital marked the final close of its early-stage fund at around INR 1,135 Cr. 

Climate-focussed Green Frontier Capital also launched Green Frontier Capital India Climate Opportunities Fund with a target corpus of INR 1,500 Cr last year.

The post Exclusive: ZeCa Capital’s INR 150 Cr Sustainability-Focussed Fund Gets SEBI Nod appeared first on Inc42 Media.

Last month, Nasdaq-listed Indian travel tech giant MakeMyTrip launched a GenAI-powered feature, Collections, on its platform to make hotel and homestay discovery smarter, easier, and more personalised. The feature leverages AI and deep traveller insights to intelligently find accommodations to match customer needs and preferences.

Notably, MakeMyTrip is doubling down on the personalisation of user experience at a time when the GenAI wave has taken the industry by storm, and hyper-personalisation is the new norm. 

However, what could surprise you is that it is not the travel tech platform’s first tryst with artificial intelligence (AI). In fact, the company’s rendezvous with AI is now nearly a decade old.

Over the years, the company has remained steadfast in its quest to maintain quality data to train and fine-tune its models, giving its customers features like zero cancellations and price lock ahead of time. However, with the advent of GenAI two years ago, it is now forced to relearn the rules of the game.

This is where the company’s Group CTO, Sanjay Mohan, sees a dearth of AI talent as a major hurdle, even as the company has largely kept itself ahead of the curve by constantly training its team on the subject.

Having jumped on the GenAI bandwagon just two years ago, the company has been successful in integrating the tech into some of its operations such as email communication sent by executives to customers and streamlining content on its description pages, much is still left to explore.

What’s on the cards? Let’s understand as Inc42 speaks with CTO Mohan in detail about the company’s AI adoption journey, especially the prerequisites of embarking on this quest. 

For more on the $11 Bn company’s AI journey, data collection and security, and GenAI adoption, here are the edited excerpts…

Inc42: The rise of GenAI has put the spotlight on the adoption of AI in companies. How did MakeMyTrip start its AI journey?

Sanjay Mohan: We started building our first data platform nine years ago. It took us several months to begin data collection and enter the production phase. This required building data science models, fine-tuning them, and testing and tweaking them as needed. 

We built a robust data pipeline in the company for almost two to three years before launching rich AI-enabled features for our customers about six years ago.

The first use case of AI in our company was in personalisation. We started with personalising the look and feel of the home page for every user or cohort of users.

Features such as ‘zero cancellation fee’, ‘price lock’, or other personalised offers have been created using this data pipeline and building mathematical models to use that data effectively.

Inc42: When did you start using GenAI models? What are their use cases in the company?

Sanjay Mohan: Our GenAI adoption started two years ago when there were only OpenAI’s GPT models available. So, we just took off-the-shelf language models and started building analysis with those. Our key GenAI use cases include analysis, synthesis, and translation. 

For instance, individuals on their business trip may not require hotel reviews from people who stayed at a particular property with their families. This is where MakeMyTrip helps users with summarised reviews in two lines and provides information relevant to a particular user, so they don’t have to go through hundreds of photo reviews.

Besides, all the packages provided by MakeMyTrip have a one-page description. Earlier, these descriptions were written by humans, so uniformity of content was a concern. To remedy this, we used GenAI for content synthesis to give description pages a uniform. 

To make customer-facing communication error-free, we have also introduced a similar kind of uniformity in the email drafts for our call centre executives.

With GenAI, we have also enabled users to book flight tickets by speaking in Hindi or English. This is where the translation capability of the large language models played a key role.

After working with only off-the-shelf LLMs for a year, we are now focussing on building custom models tailored to different business lines, including flights, hotels, holidays, and ground transportation.

Leveraging our domain knowledge, supply and demand insights and data, we have built custom models that are helping our customer care executives save at least 20% of their time. Besides, enquiry calls are now shorter and customers are more satisfied with our initiative of summarising the main points from the calls using GenAI models.

However, we also understand that GenAI is not the solution for everything. GenAI has a fair use where data is unstructured or for enhanced multilingual interactions. 

Inc42: How have you adopted AI for the company’s internal workflow?

Sanjay Mohan: We use it a lot for monitoring. When running a large operation like MakeMyTrip does, with a huge customer base, we have to monitor our site availability, business metrics, and a bunch of other things at a network operations centre (NOC). 

Using AI, we have built a monitoring platform where we put thresholds, and if, for instance, bookings drop to a certain number, then the platform starts sending alerts. We started doing this nine years ago, and today, the platform sets these thresholds on its own.

Inc42: How have the time and cost involved in training datasets changed over the years?

Sanjay Mohan: The non-GenAI models that we built earlier were using standard large CPUs. The way technology was seven to eight years ago, it would take us around a quarter or more to train a model, and then three to four months to put it out in the market. 

That learning phase remains the same, even with GenAI. However, the training part has become much easier because we already have foundation models, which is almost 70% of the work. 

Though the cost involved is much higher for GenAI, there has been at least a 50X reduction in the cost of building these models in the last two years. This cost is expected to reduce further as these models get smaller.

Meanwhile, we have started reaping the benefits of the initial few years we spent building our company’s data pipeline. As per the standard industry metrics, 70% to 80% of data scientists’ time goes into cleaning up data. It’s a huge loss, and we could avoid that by building a very robust data platform where only quality data flows. We have all of these checks and balances in place.

Inc42: What’s your take on the talent crunch in AI? Has this been a challenge for you?

Sanjay Mohan: Talent crunch has always been there. Be it India or the US, the entire world is witnessing a dearth of data scientists. If you look at the talent work that has been going on in the US for the last six to seven years, it has all been around data. But look at the big five or Magnificent Seven in the US, they are still fighting over talent. 

Inc42: How did you navigate through this challenge? Did you focus more on upskilling?

Sanjay Mohan: We had to both upskill our existing talent and hire new people. Initially, when we didn’t have a data science team, we had to get someone from outside to at least guide others. We have also trained many of our engineers to fill the talent gap. 

When we started, there was one team doing horizontal data science for all business lines. Now, every line of business has several people working on data science models. 

When such talent becomes pervasive in the company, and you have trained enough people to handle those models, that’s the best state to be in. Unfortunately, it has only happened for the pre-Gen AI models.

Now, with GenAI, we are again on the same track and have started training a pool of people skilled in this technology. We have groomed a few. 

Hiring for GenAI is difficult because this wave is only two years old in India. So, we need to look for talent that has been doing AI in general with some data science background, and a lot of curiosity to learn. 

Inc42: Does MakeMyTrip help enable AI adoption in other enterprises with its AI models or tools?

Sanjay Mohan: Our models are our competitive moat. Being a leading provider of travel in India and the leading ecommerce site for travel, we treat data as our IP. 

I don’t think anyone in India, in terms of data on the supply or data on the consumer, can come anywhere close to what we have put together over the years.

If someone has to travel to or in India, they will most likely come to MakeMyTrip, and we treat this data as gold. There is no way that we would give that away to others.

Besides, it’s also about keeping the pool of our customer data safe.

Inc42: With so much data in hand, what measures do you take to ensure the safety of that data, especially in the age of GenAI?

Sanjay Mohan: I believe legislation like the Digital Personal Data Protection (DPDP) Act will play a significant role in ensuring data protection. 

But, we began our data anonymisation efforts several years ago, well before the DPDP was even considered. All of our data is anonymised for internal use, which means that employees only see an opaque UID, a unique user identifier. 

When sharing our customers’ data with airlines or hotels, we have a contract in place to protect their data. 

Besides, we treat users’ personally identifiable information and sensitive personal information the way credit card numbers are put behind a vault.

Inc42: Various reports suggest that Indian enterprises are lagging in AI adoption. What’s your take on it?

Sanjay Mohan: I think people don’t understand the value of data. It breaks my heart to see that hardly anyone cares about building a robust data platform where quality data flows. It’s there in the US.  

Inc42: With the advent of AI agents, do you see the need for human intervention completely going away?

Sanjay Mohan: I think the need for human intervention will remain. Even in software, no matter what you do, you can’t automate everything. AI agents will make things more efficient.

Even in the case of programming, people say agents will start writing code, and it won’t need developers. I do not believe so.

[Edited By Shishir Parasher]

The post Inside MakeMyTrip’s GenAI Play — How The Travel Giant Has Revamped Itself For The AI Age appeared first on Inc42 Media.

At a time when an increasing number of new-age tech ventures in the country are launching AI platforms for various business use cases — from streamlining customer interactions with agentic AI to improving workflow management —  B2B ecommerce platform OfBusiness has sharpened its AI arsenal.    

Earlier this year, the company launched an AI platform, Nexizo, to help its existing customers gain deeper market insights and optimise their sales, logistics and inventory functions. 

Understandably, the company’s AI push, in the form of Nexizo, has come at a crucial time, as the company gears up for a $1 Bn IPO, likely in the second half of 2025.

But, what is OfBusiness up to when it comes to AI adoption and implementation, one may ask? 

To understand this, we spoke with OfBusiness’ cofounder and chief business officer Nitin Jain, who said that Nexizo is OfBusiness’ extended leap in the realm of AI. 

With this move, the startup has transitioned beyond just showcasing pricing and tender details to assisting enterprises with lead generation. 

Now, before we dive into what OfBusiness is trying to achieve with Nexizo, let’s learn a thing or two about the Gurugram-based unicorn. 

Founded in 2016 by Asish Mohapatra, Nitin Jain, Ruchi Kalra, Vasant Sridhar, and Bhuvan Gupta, OfBusiness offers raw material procurement and financing solutions to SMEs in the manufacturing and infrastructure sectors. 

The categories of these services range from steel and chemicals to polymers and bitumen. The company, which achieved unicorn status in 2021, also runs a fintech arm, Oxyzo.

OfBusiness’ operating revenue jumped 25% YoY to cross the INR 19,000 Cr mark in FY24, while net profit surged 30% YoY to INR 603 Cr.

The company claims to have impacted over 4 Lakh businesses via its tech, with deliveries to more than 13,000 SMEs. It is this user base data the company claims to be leveraging to train AI models and sharpen Nexizo.

OfBusiness’ Brush With AI

Nexizo is not the company’s first and only tryst with AI. According to Jain, OfBusiness had been experimenting with the emerging tech even before OpenAI stirred up a storm worldwide. 

Although at a small scale, the executive said, the startup already had machine learning (ML) models in place to showcase government tenders to its clients.

Before the launch of Nexizo, its AI engine helped its BidAssist platform process and track over 25 Mn data points annually from more than 50 Mn tenders and documents.

“We were the first ones in the B2B world to adopt AI. I, being a computer science engineer, have a passion for looking where I can plug AI into the organisation,” Jain said.

Therefore, with the advent of OpenAI’s ChatGPT, the startup decided to automate client interactions. Jain launched a chat assistant that allowed its customers to access market prices of various raw materials. 

It also automated the process of sending various news articles about commodities to OfBusiness’ clients. The platform was also updating prices of 10,000 commodities in real time.

OfBusiness’ Pivot To Proprietary AI

However, this conversational platform functioned as a simple layer over an existing large language model (LLM). The company then realised the need to develop its proprietary AI.

Soon, it focussed on building its own small language models (SLMs) by fine-tuning Llama with its in-house data pool for tender classification and information.

“That’s what Nexizo does – it showcases price and tender information to the clients. It’s like a search engine where, if our clients ask, ‘show me an INR 200 Cr tender in Nashik for energy’, our fine-tuned LLM processes the request, performs tool calling, and fetches the relevant information,” Jain said, breaking down the working of the platform.

The company started training the open-source model with its existing data towards the end of 2023. After being live in the beta version for almost a year, Nexizo was launched around four months ago.

According to Jain, bringing AI assistants to B2B businesses is inherently difficult because the average order value is high at INR 10 Lakh to INR 20 Lakh level. So, human interactions with the sales teams are unavoidable. 

Despite the challenge, Nexizo has managed to gain 1 Mn registered users on the platform with about 400K monthly active users within a short span. 

Our users can be put into two large buckets — small enterprises and contractors, banks or NBFCs and raw materials suppliers. While small enterprises and contractors consume OfBusiness’ information on infrastructure, building roads, rails, buildings, and bridges, the platform helps NBFCs and suppliers generate leads. 

Currently, the platform has about 20 to 25 enterprise clients.

Meanwhile, the company’s BidAssist platform is expected to slowly integrate into Nexizo. OfBusiness is also mulling a new pricing model. Earlier, BidAssist used to charge users to access tender information. Now, the company plans to earn by selling leads to enterprises while giving tender updates for free to its users. However, the company is still experimenting with Nexizo’s monetisation strategy.

OfBusiness’ AI Thesis 

Even though Nexizo is a separate SaaS platform, the business is working because the product is related to OfBusiness’ core offerings. 

“We have targeted people who are looking for tenders on OfBusiness’ platform so that we can use that information to pitch the AI product to them. We again feed this data to train our model,” said Jain.

He believes that AI platforms in sync with their core businesses are there to stay in the long run. If not aligned, the platform must function as a separate business vertical. 

“You can’t make it work in the existing companies as it requires a very different DNA. We started Nexizo because it has tender data for customers and infrastructure accounts for 30% of OfBusiness’ revenue,” Jain said.

This is precisely why Jain bets big on the success of AI initiatives like Zomato’s Nugget and NoBroker’s ConvoZen.AI — because they align with their respective companies’ primary business models.

However, according to the OfBusiness cofounder, most smaller enterprises are currently confused about AI, with many even wondering how to take the AI leap. 

“Many don’t know how to implement AI, whether to use foundational models or fine-tune their own models, or use a wrapper. Even big enterprises are still struggling to find the right use cases of AI, and they often feel that the old practices are yielding better results,” Jain said.

Why AI Adoption Has Been A Challenge In India

Despite too many tall claims, the adoption of AI has largely been a laggard, especially at the enterprise level. According to an Inc42 report, a majority of startup investors believe that most large-scale enterprises in India are struggling to transition their AI use cases from proof of concept to full-scale deployment.

While 66% of India’s top unicorns have started integrating GenAI into their offerings, only 15-20% of proof of concepts by large domestic companies in the country have progressed to production, the report finds. Upskilling the existing employees also remains a challenge that companies need to solve.

In fact, Jain said the company did not hire any new talent to build the Nexizo platform, but upskilled the existing ones.

Meanwhile, he also said that the ecosystem needs more examples from the startup ecosystem to show the way, calling Zomato a front-runner in sharing its own AI knowledge with the world with Nugget.

Top startup leaders in India have reiterated that every business, big or small, must prioritise AI adoption to increase efficiency. Although slow, India’s enterprise-level AI adoption landscape is not gloomy and is constantly evolving. 

Currently, Agentic AI is in the limelight. From Gupshup to Zomato’s Nugget and from Infosys to Zoho – the industry is abuzz with the high autonomous capabilities of GenAI agents.

As GenAI adoption grows on various fronts, expected to become a $17 Bn market opportunity by 2030, a focus on bridging the talent gap will go a long way.

[Edited By Shishir Parasher]

The post Can Nexizo Be The AI Moat For OfBusiness? appeared first on Inc42 Media.

There is no better time to talk about India’s quest to create its large language models (LLMs), especially when the world is being dominated by names like GPT-4, Llama, Gork, Gemini, et al. Well, let’s also not forget DeepSeek. Developed with a lean budget of less than $6 Mn, the AI model has ruffled the feathers of many tech giants worldwide.

Now, as far as India is concerned, we are at a crossroads. While VCs and other investors can be seen distancing themselves from foundational models to focus more on building atop the existing ones, the government is advocating the development, control, and deployment of AI using its own infrastructure, data, workforce, and business networks.    

Given the capital-intensive nature of foundational models, which also demand extensive R&D and long gestation periods, the investor concern is not unfounded and neither is the government’s vision to develop Sovereign foundational AI models to compete on a global platform. Hence, this calls for the right balance to be struck. 

Recognising that it was time for India to have its very own foundational models, including interface and reasoning models, when GenAI had just started to create a stir, computer scientist Pranav Mistry founded TWO AI in 2022. 

Headquartered in the US, the startup currently locks horns with top LLM builders of the world in both customer-facing and enterprise AI use cases. 

With its two subsidiaries (in India and South Korea), TWO AI has built models with multilingual capabilities for 50 global languages, which includes all the official Indian languages, along with foreign languages such as Japanese, Korean, Turkish, and many more.

“Our vision has been to enable communication with AI and machines or technology,” Mistry, the founder and CEO of TWO AI, said, adding that the core of TWO AI stems from the idea of unifying humans and machines.

He added that a key driver of this vision is the fact that 80% of the world speaks native languages other than English, and Mistry’s dream has been to make AI accessible to everyone.

In 2023, TWO AI raised $20 Mn in strategic seed funding from Jio Platforms and South Korean internet giant Naver. It serves customers across segments like education, banking and finance, retail, and defence. TWO AI has around 20 paying customers globally, with seven in India.

Interestingly enough, Jio Platforms is TWO AI’s investor and one of the biggest customers in India. With a team of 40 employees, comprising engineers, designers, and innovators from Oxford, MIT, IIT Bombay, Google, Samsung, Microsoft, and NASA, TWO AI is confident of ending FY25 as an operationally profitable company.

The Birth Of TWO AI

Armed with a PhD from the Massachusetts Institute of Technology (MIT) and almost a decade-long stint at Samsung Electronics, Mistry anticipated an upheaval in the realm of AI even before ChatGPT-like models began to dominate headlines across the globe.

Around 2020, Mistry was involved in building AI centres for the company (Samsung) in countries like the US, Korea, Japan, and others. During this time, he realised that a major change was underway, and soon AI was to redefine the world.

Taking cues, he set the sail for his AI adventure. Speaking with Inc42, Mistry said, he spent the first two years, following the inception of TWO AI, building the startup’s GPU infrastructure, training clusters and models, and building an AI architecture. This resulted in rigorously trained SUTRA models to solve two large use cases — for enterprises to scale businesses and for consumers to rely on a vernacular language AI assistant platform.

Today, TWO AI’s ChatGPT-like free AI assistant platform ChatSUTRA (launched mid-last year) enables multilingual conversations.

It has already garnered interest from more than 1 Mn users. Besides, amid growing concern around data privacy, ChatSUTRA promises high security as it runs on regional AI servers.

However, the startup’s models are not open source, which is also where its core monetisation strategy lies. The startup expects an annual run rate (ARR) of $20 Mn in FY25.

Inside TWO AI’s Tech Stack

The startup’s tech stack, SUTRA, comprises three main models – SUTRA-V1, SUTRA-R0, and SUTRA-P0.

While SUTRA-V1 is a pure text-based LLM, its R0 is a reasoning model that competes with larger models like DeepSeek-R1, OpenAI-o1, and LLama 3.1, all while demonstrating better indic-language capabilities.

Meanwhile, TWO AI’s SUTRA-P0 is a predictive model, designed for forecasting and analysis. Predictive models have nothing to do with language; they are purely time-series models, Mistry said. 

“In enterprise AI use cases, chat applications make up just 5% of the scope. Real AI optimisation happens in workflows and manufacturing lines, where predictive models play a crucial role.”

On top of its foundational LLMs, TWO AI has built multimedia models such as a voice model called HiFi and an avatar model.

TWO AI’s Way Forward

Mistry told Inc42 that he does not aspire to become the OpenAI or Perplexity but rather Palantir Technologies of the East, which can enable AI solutions at scale for large enterprises, eventually reaching real customers for real-world applications of AI.

While the US, Korea, and India are its main markets, TWO AI aims to scale its offerings across the APAC region, barring China.  Mistry has a special focus on India. 

This is because, as per Mistry, there are no India-based search engines or messaging platforms. To address this, TWO AI is also working on launching a homegrown consumer application, much like Yahoo! Japan or China’s Baidu. The launch is expected in the next few months. 

Meanwhile, Mistry’s plan for its enterprise AI solution is simple — not to acquire thousands of customers but the world’s top of the rung. The startup aims to increase its global customer base to 25 to 30 clients by next year.

According to Mistry, he does not wish to raise more capital, as the company has already reached the stage of operational profitability. Even cash burns are within limits. 

Now, as GenAI continues to make its way into basic workflows and operations across sectors, India needs to build its own foundational models for security reasons and India-specific requirements.

Though Bhavish Aggarwal’s Ola Krutrim, PeakXV-backed Sarvam, CoRover, and a few others have made strides in building LLMs and small language models focussed on indic languages, there is a need for more endeavour in this area. 

While TWO AI has been able to build foundational models that are more closely competing with the tech giants globally, TWO AI has plans to join hands with the Indian government to build open-source Sovereign AI models.

However, Mistry believes that the noise around AI in India is still disoriented and experts need to focus on solving more India-specific problems with more modular models with a high level of collaboration. 

“No one is wrong in AI. Everyone needs to work together. India needs a lot of solutions, and not one LLM solving it all,” he said.

For now, it remains to be seen how Mistry walks the talk of capturing the broader APAC market while helping India with a more sophisticated indic language-based AI assistant platform that promises unprecedented data privacy and context.

Now, as GenAI presents vast opportunities — with India alone expected to surpass $17 Bn by 2030 — can TWO AI challenge the dominance of giants like OpenAI, Google, Meta, or DeepSeek?

[Edited By Shishir Parasher]

The post With Its Indic Language Arsenal, Can TWO AI Become The GPT Of The East? appeared first on Inc42 Media.

Former Milkbasket cofounder and CEO Yatish Talvadia has launched a new venture, D2C grocery brand Anmasa.

Talvadia has cofounded the startup with Shailendra Upadhyay, the former founder of grocery delivery platform Veggie India that was acquired by Milkbasket in 2019.

It is pertinent to note that Milkbasket is also an ecommerce platform that sells dairy products, groceries, fruits, vegetables, and bakery. In 2021, Reliance Industries’ subsidiary Reliance Retail Ventures acquired a majority stake in the startup. After serving as the acquired company’s CEO (after erstwhile CEO Anant Goel resigned in 2020), Talvadia stepped down from his position at Milkbasket in 2023.

Anmasa was incorporated in the same year, but it became fully operational towards the end of 2024. The D2C startup sells products such as whole wheat atta (flour), wood-pressed oil, spices, and dry fruits. 

Currently, it has more than 80 stock keeping units (SKUs) and differentiates itself from its competitors by providing fresh cold-pressed atta where its customers can choose the quantity of different grains they want to use in making customised whole wheat atta. These grains may include millet, grams, and more.

Anmasa’s cofounder and CEO Talvadia told Inc42 that the inspiration for launching the venture came from his own struggles while dealing with an autoimmune disease. While doctors suggested he switch to gluten-free food, he found it difficult to rely on a single brand that would cater to this need. This made him depend on local atta chakki (mills) for freshly ground flours, and he realised that this was a major market that could be partially captured. 

Catering To Premium Market With Omnichannel Presence

As per the cofounder, 88% of the wheat flour market in India is unorganised and the local mills are unhygienic in most cases.

Anmasa aims to cater to customers who do not prefer packaged wheat flour of popular brands such as Aashirvaad, Pillsbury, or Fortune, and want premium and hygienic products, Talvadia said.

This is also the reason the startup has chosen to take the omnichannel route. Currently, Anmasa operates an experiential store in Gurugram where customers can visit, inspect how the processing is done, choose their customisation option, and place an order online or offline. Its online service is currently available in Gurugram and promises delivery in 90 minutes. Anmasa also has a microprocessing centre in the city, which is like a dark store.

While Anmasa’s cold-pressed oils, whole spices, and dry fruits are pre-packed after processing, Talvadia said that its wheat is always freshly milled. The startup doesn’t leverage other quick commerce platforms like Zepto or Blinkit at this time to ensure this promise of freshness, he said.

“We do not want to choose a marketplace model of selling our products on other ecommerce platforms for two reasons. First, we will end up being far from consumers, losing personal touch and customer base. Second, a marketplace model also doesn’t go well with the ethos of our brand, which is selling fresh flour. If we keep the inventories of our products at other quick commerce dark stores, we are competing with more established and new-age brands, and it becomes a commodity play,” Talvadia said.

Anmasa is also raising $1 Mn (about INR 9 Cr) in its pre-seed funding round from a few investors to penetrate deeper into the Delhi NCR region. It plans to open at least 10-12 physical retail outlets or “experiential centres” in the region in 2025.

However, Talvadia didn’t disclose the names of the investors.

The startup plans to foray into more Tier I cities by mid-2026. However, it is yet to zero down on the regions for this.

At its present capacity, Anmasa claims to serve more than 2,000 customers via online and offline channels. Between October 2024 and February this year, the startup claims to have witnessed 15% revenue growth month-on-month.

Anmasa competes with D2C brands such as Zoff (in the spices market), Anveshan (in wood-pressed oil and dry fruits markets), Jiwa and Two Brothers Organic Farms (in gluten-free flour products), among others.

India’s ecommerce market is expected to become a $400 Bn market opportunity by 2030, of which food and FMCG will together account for $68 Bn.

The post Exclusive: Former Milkbasket Cofounder Yatish Talvadia Launches D2C Grocery Brand Anmasa appeared first on Inc42 Media.

It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong — American hedge fund tycoon George Soros.

On the D-Street, however, nothing is certain — making a fortune or wasting it. One day, you may find yourself riding the bull with an average Joe (stock), and the next, a sudden downturn, driven by multiple macroeconomic factors, could wipe out all the gains and bite into your initial investments.

Now, while it’s impossible to predict a market downturn, losses can be minimised by taking an opposite position in a related asset. This risk management strategy is called hedging. Simply put, this investment strategy involves trading in derivatives to offset steep losses during major market fluctuations or a market crash.

While the concept of hedging is popular in the US and other global markets, it is still in its nascency in India. The same is true for structured products — hybrid investment instruments that use derivatives to reduce risk in a trader’s portfolio. 

However, market analyst and expert Rahul Ghose is trying to change the hedging game in the country with Octanom Tech. Founded in 2021, the startup claims to be pioneering India’s first ‘hedged-style’ trading platform, Hedged.

Deploying AI-ML and complex derivative equations, the platform suggests low-risk structured products to its users. This helps investors mitigate losses, even at times of peak market volatility.

Besides, Octanom’s Hedged is its first platform. The company aims to soon launch its next product – an analysis platform for traders and brokers. Expected to be launched by July this year, the new platform would lock horns with platforms like TradingView.

The startup raised an undisclosed amount of funding in 2022 at a pre-money valuation of $2.2 Mn. Its existing investors include Shankar Vailaya, the ex-director of Sharekhan; Nitin Gupta, the founder and CEO of Asymmetrique; We Founder Circle, and other angels. The company has raised a major round recently, but Ghose did not divulge details of the deal.

The Birth Of An Indian Hedging Bull

Before incorporating the SEBI-registered wealthtech company, Ghose spent around 16 years in stock market trading. He has also held top positions at Sharekhan, a full-service stockbroker, for almost nine years.

He decided to quit his high-paying cushy job after realising that there was a dire need for investment instruments that can help Indian investors diversify their assets beyond the existing ones that have a “long-only” approach. 

“Every financial investment instrument in India – be it stocks, mutual funds, ETFs – has the same thing in the armour, they are long-only in nature. This means, the market has to go up for any of these financial investment instruments to make money. In 2021, we, a small team of three people, found that India is the only country in the world with long-only financial investment instruments,” he said.

Another trigger for him to launch such a platform was the market crash during the Covid-19 pandemic. Ghosh recalled that when Indian investors should have invested more, the fear of a further loss made them chicken out, causing mutual funds to decline by 40-50%. 

Witnessing this, he decided to launch a financial instrument that could bolster hedge-style funding in India, alleviating investors’ fears. 

However, the road has been anything but easy. For starters, it was difficult to fetch an asset management company (AMC) licence immediately to launch a fund. Besides, the company needed to study whether there was an appetite for such a product in the market or not.

Soon, Ghose, along with his team of mathematicians and data scientists, started building the platform leveraging its proprietary mathematical equations. After two years of burning the midnight oil, Ghose launched Hedged in 2023. 

With this, he claims to have rolled out India’s first financial investment instruments that offer stock recommendations on long and short-term investments irrespective of the market trend.

The Balancing Act: Betting Both Ways

Ghose, with its platform trained on in-house algorithms, claims to have “curated structured products, which include stocks, bonds, and derivatives, which not only provide investment opportunities but also protect against losses”.

Unlike traditional platforms or stock advisers that claim to guarantee increased returns, the unique selling proposition of Hedged is to help investors reduce the downside risks.

“Our financial products are agnostic to market direction. For example, amid the current market downturn, Nifty is down 14% from its high but we are at plus 8%. At present, most portfolio management services, mutual funds, and quite a few smaller investment basket platforms are in the red. We are among few platforms in India where users’ investments are in the green,” Ghose said, adding that their tech provides 1:1 beta on the downside. 

What this means is that when Nifty is down 10%, Hedged-recommended investments could be up 10%. “However, when Nifty is up 10%, we would still be up 10% and are not claiming we can be up 20%. We can mimic the index both on the downside and the upside,” the founder said.

Besides the structured products, Hedged has built a “Nifty Crash Meter” or “Hedgeometer” that helps investors take necessary precautions and prevent losses by providing them with real-time index alerts and updates.

Hedged currently generates 80% of its revenue from institutional investors, including family offices and HNIs, while the remaining 20% comes from retail investors. It aims to touch the INR 10 Cr revenue mark by the end of FY25 and achieve operational breakeven.

How Octanom Is Tapping The Market

Currently in the PMF stage, the startup already has around 70K registered users on its platform. Of these, 30K are monthly active users. Hedged has divided its customers into three broad categories. 

The first ones are retail investors who usually depend on various trading or brokerage platforms for good returns. The second category involves the HNIs and Category III funds that have to keep depending on mutual funds or other similar long-term investments to generate good returns. The third category of customers are regular and serious traders.

The platform can be accessed for free by the first category of investors. However, this does not give them access to the analysis of risks and returns done using its proprietary equations. Its Hedgometer is also available for free.

The platform charges an annual subscription fee of INR 75,000 from serious retail traders and INR 2.5 Lakh a year from HNIs.

Meanwhile, Octanom is in the process of partnering with an AMC to roll out its structured products for retail investors via banks and brokerage platforms.

Recently, SEBI issued a circular on Specialized Investment Funds (SIFs), allowing AMCs and mutual funds to launch long-short funds with a minimum investment amount of INR 10 Lakh. Octanom, in partnership with an AMC, aims to launch products for this new asset class soon. With this offering, the startup will compete with deep-pocketed players like Jio Financial Services.

Charting The Course In A Competitive Market  

Structured products are not a new concept in India. Similar products are already being offered by companies like Anand Rathi and Nuvama. However, unlike Octanom, which focusses solely on low-risk structured products, these instruments make up only a small part of the offerings from other brokerages and financial institutions in the country.

Ghose added that, unlike its Indian peers, Hedged has a minimal debt component, which enhances returns even during market downturns.

However, Octanom’s platform faces significant competition at a global level from the likes of JP Morgan, Morgan Stanley, and BNP Paribas and startups such as Arta Finance and ADDX.

Despite this, Ghose claims to have built Hedged centred around the US market. But, it aims to crack the Indian market first before venturing into the US. 

Ghose said that Hedged will make a foray into the US market once it clocks INR 100 Cr in revenue, which he projects to achieve in three years. 

“There are 28 Lakh people in India who have INR 50 Lakh+ in markets. Hardly there are products in the market protecting the downside. So, if I can get a healthy 10K to 30K of these 28 Lakh people, which is growing at 43% CAGR, it’s INR 500 Cr in revenue,” he said.

As of now, Hedged is trying to get portfolio management services and investment adviser licences from the SEBI. This will allow the company to provide customised structured products as well.

Meanwhile, the market opportunity for Hedged is significant in India and globally. As per a report by BNP Paribas last year, the demand for structured products has grown in recent years on the back of factors like capital protection, enhanced returns, and customisation options. 

Besides, several companies are leveraging AI to transform various areas of their structured product businesses, including task automation, productivity enhancements, and forecasting capabilities.

Meanwhile, the Indian fintech industry faces significant regulatory challenges. SEBI and RBI’s policy changes have had a major impact on fintech startups in lending, wealth management, and other sectors in recent years. Moving forward, this will be a key test of the company’s resilience and Ghose’s decades of industry experience.

[Edited By Shishir Parasher]

The post How Octanom Plans To Safeguard Retail Investors From Market Shocks appeared first on Inc42 Media.

At a time when generative AI (GenAI) has become a crucial cog in the wheel of corporations and conglomerates to improve their operational efficiency, the human resources (HR) department stands to benefit like never before.

From the effective screening of hundreds and thousands of resumes to automating interviews, the emerging technology has much to offer to the department that deserves to be heard at the table, much like a strategic business partner. 

However, AI adoption in the HR function has lagged behind other departments. While several factors contribute to this, the primary reason is the limited availability of GenAI models. Notably, existing solutions largely focus on basic resume summarisation and application processes and fail to go beyond these tasks.

This is where Bengaluru-based Northtstarz.ai steps in to fill the gap. With its small language models, built in-house and trained on 40,000 real-life interviews, the startup has upped the hiring game for startups and enterprises, allowing them to find the right talent that could align with their vision.  

After working with recruiters and experts for almost two years, gathering data and building its models, Northtstarz.ai recently raised a small pre-seed funding of $250K (INR 2 Cr) from a few angel investors and started the commercialisation of its GenAI-based recruitment platform in January. 

Having already secured clients like Mahindra Logistics, The Good Glamm Group, The Media Ant, and international firm EPIC Investment Partners, Northtstarz.ai operates in the global HR tech market, projected to breach the $88.38 Bn mark by 2033. In addition to its current clients, the startup is piloting its product with 50 companies, including major players in BFSI, food, ecommerce, and coworking sectors. 

Now, it could come as a surprise that the birth of Northtstarz.ai wasn’t foretold and is rather a byproduct of a timely pivot.

The Genesis Of Northtstarz.ai 

Northtstarz.ai was founded in 2022 by industry veterans and long-time friends Avinash Singh, Rajiv Ranjan, and Saurabh Sisodia, who bring a cumulative experience of more than 60 years.

While CEO Singh is a serial entrepreneur and a sales veteran, cofounder and chief product officer Ranjan has worked with major banks across India, Poland, Malaysia, and the Philippines. CTO and cofounder Sisodia has worked closely with giants like Oracle, Amazon, and Paytm, delivering tech solutions.

Even though the trio of friends hailed from different industries, they have long shared a common peeve — the lack of industry-ready talent in the country. 

This real-world pain point inspired them to build an HR tech platform, Interview Vision, to help the fresh-out-of-college talent evaluate themselves on the employability scale and understand and improve the critical skills needed to succeed in job interviews.

However, they soon realised that the model was not scalable. With this revelation, the trio of friends started focussing on recruiters rather than resources. Back to the drawing board, the cofounders decided to build a centralised cloud platform that could make the hiring process for HR professionals easier and efficient. It was precisely at this point that Northtstarz.ai was born. 

In their quest to offer something unique to the HR fraternity, the cofounders today claim to be cutting above the rest.  

Speaking to Inc42, CEO Singh said, “Most GenAI HR solutions today simply wrap around existing large language models. If you ask them technical questions, they will respond, but they have limitations. We are among only three or four companies globally that train our own models to provide a comprehensive employability assessment.”

Inside Northtstarz.ai’s Working

The platform allows recruiters to post job openings, with GenAI assistants suggesting relevant skills based on prompts and generating role-specific questions.

The platform enables recruiters to post a new job with the help of GenAI assistants, making the entire process efficient and seamless. These assistants are also capable of generating role-specific questions, allowing HR professionals to choose the best from the talent pool.

Once the job is posted, applicants can apply and conduct a 15-20 minute virtual interview at their convenience. On the back-end, based on the scores given by recruiters and the large sets of data available, the platform shortlists top candidates. This helps lighten the first phase of the screening process.

“Our platform can enable the recruiter or the company to find people who are not only great at meeting their KRAs but also the ones who will walk that extra mile to deliver,” he said. 

He added that soft skills like innovation, adaptability, and collaboration are key elements that most candidates lack. Given that recruiters or hiring managers are not trained interviewers, they could make wrong hiring choices. This is also an area where the platform is capable of evaluating candidates.

“We conducted over 40,000 interviews, collected answers to around 100 expert-approved questions, had them manually scored, and used this data to train our AI model. Over two years, we’ve reached 82% accuracy in mimicking expert evaluations,” said Singh. 

Notably, Northstarz.ai has trained its models in six key industries — BFSI, IT, IT-enabled services, staff augmentation, aviation, and hospitality. These industries account for 45% of new employment in India annually. The startup plans to expand into more sectors soon.

“We have become the perfect tool for companies that require candidates 0 to 6 years of work experience. This is also where the mass hiring and churn take place,” Singh said. 

He added that NBFCs make for an attractive proposition for the startup as this sector has a high attrition rate.

Moving on, according to Singh, many job seekers now rely on LLM-based applications to answer interview questions. This makes it difficult for recruiters to gauge the true abilities of their potential talent. To address this, Northtstarz.ai has built models capable of detecting AI-generated responses during interviews.

The platform is mobile-friendly and complies with the Digital Personal Data Protection Act (DPDPA) guidelines, ensuring data security.

Currently, Northstarz.ai offers three pricing plans to its clients — INR 12,500 for 50 interviews a month, INR 23,500 for 100 interviews, and INR 63,000 for 300 interviews.

According to Singh, despite its pricing, which is on par with international markets, its clients willfully bear the cost as the platform helps them cull the burden of dealing with thousands of resumes, all while enabling recruiters’ efficiency by at least 3X.

What’s The Big Plan?

The startup expects a steady revenue starting March and has its sights set on boarding 40-50 customers over the next six months, each paying an average of INR 30,000 per month. Achieving this goal will position it for a larger funding round.

Meanwhile, a major goal is to build an Agentic AI platform that will go beyond the recruitment process to help CEOs with corporate performance management. Besides, it plans to ramp up international pilots and collaborations in the coming months. 

While the startup has focussed on building its models to step up the hiring game, the competition is growing in the space. Zoho Recruit, for example, is also using AI to help companies make smarter hiring decisions. Meanwhile, startups such as Stark.ai also command a stack of next-generation GenAI-based HR tech solutions. In addition, HR tech startup Darwinbox has recently raised $140 Mn to deepen its tech stack. 

At an international level, Northtstarz.ai faces competition from Apriora, Interviewer.AI, as well as global hiring platforms such as LinkedIn and foundit.

In a space where innovation is moving at a breakneck speed, sustaining its technological edge and proving strong revenue traction will be critical for Northtstarz.ai if it aspires to a mark in the global HR tech industry.

[Edited By Shishir Parasher]

The post Can Northtstarz.ai’s AI Stack Eliminate Costly Hiring Errors? appeared first on Inc42 Media.

Licious has hoisted its sail for the D-Street voyage. With this, the Bengaluru-based startup, which almost defined and shaped the whole consumer behaviour of buying meat online over the last decade, is set to become India’s first online D2C meat brand to get listed on the mainboard.

While the Indian public market is not new to the concept of D2C, the idea of a listed D2C meat and seafood startup is as scarce as hen’s teeth. It is this notion that seems to have bode well with the D2C meat delivery unicorn for its listing ambitions. 

But, does the company have enough meat to cook up a sizzling listing, and, if not, what could put it on the chopping block? 

Now, before we dive deeper into answering these questions, it is important to underline that Licious dominates Indian kitchens not just in tier-I cities and towns but also tier-II. Licious started its journey in 2015 when the concept of D2C was not known to many. 

The company persisted, rode the D2C wave and became a unicorn in 2021. Notably, the company uses chicken as its main bait, drawing in 40% of its revenues, while fish hooks another 30%.

Despite its unicorn wings, small meat and fish shops, ruling the roost (unorganised market) with an iron fist, pose risks to the long-term prospects of the company. Not just this, regional D2C brands like Zappfresh and Freshma are also cooking up a storm in this segment.  

To cut above the rest, what aces do Licious cofounders Abhay Hanjura and Vivek Gupta have up their sleeves? 

This question is crucial because the company is currently enduring growth challenges. The startup garnered operating revenues of INR 685.05 Cr in the financial year 2023-24 (FY24) against INR 748 Cr in FY23. The metric stood at INR 682.5 Cr in FY22.

Licious Omnichannel Game Plan

Today, almost everything is available at our doorsteps within 10-30 minutes, thanks to the imminent rise of the quick commerce sector. The impact has been such that there’s hardly any sector or industry that does not want to embark on the quick commerce adventure. 

Learning tricks of the trade from players like Swiggy Instamart, Zepto, and Blinkit (designed for ultra-fast deliveries), several traditional D2C brands and ecommerce platforms have joined the fast delivery race to cash in on the quick commerce boom, and Licious is no different.

Licious is working on its omnichannel game plan, and quick commerce and offline retail are going to be the two main growth levers of its larger strategy to dominate the Indian meat and seafood market.

Now, given the perishable nature of the inventory, it is natural for a brand like Licious to forge a network of dynamic and meaty supply chains and equip itself with more dark stores. This could mean burning more cash. Nevertheless, this shift is going to be quite an interesting one to watch.

However, according to Hanjura and Gupta, newer strategies like 30-minute delivery or omnichannel are only “tactical changes” that the poultry and seafood business is embracing to keep up with the evolving industry trends and market opportunities. 

“As the industry changes, the brand will keep evolving, keeping the quality and standard as primary focus,” the cofounders said.

Throwing light on the aforementioned statement of omnichannel being a tactical play, he said that the company’s online and offline retail channels will be aimed at strategically addressing specific consumer behaviours for every product category. 

For instance, Hanjura said, Padma Hilsa isn’t the first thing consumers would want to be delivered in 10 minutes just when they wake up in the morning. For such products, offline would make for a great bet.

As for its quick commerce play, Licious would rather bet on poultry products like fresh-cut chicken, eggs, and ready-to-cook foods such as kebabs.

“In 30 minutes delivery, we are seeing opportunity in one category — our value-added products such as the pre-marinated or ready-to-cook meats. You must identify the consumer psychology in play here, where they are looking to prepare something quick and eat,” Gupta said. 

“We have a range called ‘Heat & Eat’ — food that can be cooked in two minutes. There is another range of products that can be cooked in 10-15 minutes. So, for these products, the 30-minute delivery model will add more value,” the founders added.

However, in metro cities, where people are “time-starved” (as noted by Gupta), the brand sees quick commerce opportunities spreading across products.

Taking the example of Gurugram, the founder said that Licious saw around 10% or 15% revenue growth on the back of 30-minute delivery in just one quarter with little marketing efforts.

Today, Licious claims to be driving its new business model relying on the strong production, supply chain, and last-mile delivery capabilities it has built since its inception. 

Challenges & Opportunities At Play

While the founder did not talk about potential roadblocks, according to Sateesh Meena, the founder of Datum Intelligence, all online meat brands are currently struggling with low growth rates, perishability and high wastage, and higher pricing than local shops.

“Licious’ omnichannel strategy would help it increase its number of SKUs, cater to retail-focussed consumers, and leverage localisation while extending shelf life with ready-to-eat packaged foods. However, challenges remain. This model isn’t easily scalable pan-India due to intense local competition. They are making different bets, and we are watching which one pays off,” said Meena.

Meanwhile, if one were to look at the company from a broader lens, quick commerce is not a new road for the brand. Piggybacking on Zepto, Blinkit, and Swiggy Instamart, the startup has already been delivering its products in 10 minutes.

However, Licious will need to up its game here too. This is because 80% of its business currently happens on its platform and the remaining 20% is enabled by quick commerce players, who also have their respective meat brands in the pipeline.

Moreover, the startup’s 30-minute delivery is currently available in Gurugram only. The company plans to expand to Bengaluru soon. 

In addition, in the next six months, the company has plans to make 30-minute deliveries at 80% of the areas where it counts its footprint. The startup currently commands an online presence in around 20 cities in India. It plans to grow its online footprint to 50 cities in the next few years.

On the offline retail front, Licious currently has only three stores in Bengaluru. More brick-and-mortar stores are on the cards in Mumbai and Delhi. 

Moving on, Licious’ recent acquisition of My Chicken and More, a Bengaluru-based offline retailer, has been another strategic feather in its omnichannel cap.

To ensure that its omnichannel expansion and quick commerce ambitions work in tandem, Licious has plans to set up another 50 new delivery centres by June this year. It presently has 100 such centres. 

Understandably, this spate of expansions would come with a toll (cost), especially at a time when Licious is looking to achieve profitability within 2-3 months. Not to mention, experts see this quite paradoxical, with many even calling profitability a long shot.

Licious’ Tech Advantage 

According to Hanjura, Licious has a vertically integrated supply chain, which gives it the flexibility and the capability to go offline seamlessly and cost-effectively.

Besides, the cofounders said a significant amount of innovation, R&D, feed formulation and harvesting science is carried out in the backend to bring quality poultry to customers.

“This modernisation is led by microbiologists, veterinarians, and food science experts at our processing centres,” Hanjura said.

Currently, Licious owns six such processing centres across India and three other managed processing centres. These are fully automated ESG complaint centres, maintaining the highest food safety standards in the world such as FSSC 22000 and SA8000.

“We are not just the first in India to achieve these standards but also one of the first eight in the world to have SA8000 certification. This is the kind of effort we are putting in to bring 500 grammes of chicken to your doorstep,” said Hanjura.

The cofounder believes that this entire backend process is ultimately Licious’ biggest competitive advantage — separating the sheep from the goats. 

“Licious is doing what Amul did to the milk and dairy industry in India,” Hanjura said.

Competition On The Prowl

Along with its tech advantage, the founders see enough scope of opportunities in a market largely dominated by neighbourhood fish and poultry shops. 

However, Meena feels that even though the startup’s cofounders believe that its high tech and innovation in the backend deserve a bit of a premium compared to the fish or meat available in the local market, India continues to be a cost-sensitive market.

Meena pointed out that unlike the online market where customers are ready to pay a premium for convenience, the target customers in offline retail are going to be more price-sensitive.

Though the startup takes pride in its quality, Meena advises caution on the price front as it expands offline, especially in tier-II cities.

Moving on, apart from local meat and fish shops, Licious feels heat from FreshToHome,  TenderCuts (acquired by Good To Go in 2023), ChopServe (acquired by Meamo in 2021), and Meatigo (now acquired by ITC this year).

In the quick commerce space, Zepto poses a threat to Licious with its new meat brand Relish, which was launched in October 2023. In addition, the company faces tough challenges at the regional level, too, as names like Freshma continue to grow unabated in the south.

Enduring competition in the space, Licious saw an 8.4% YoY dip in FY24 revenues. Interestingly, the founders passed the buck to Swiggy, which shut down its meat delivery vertical, and the fallout of Dunzo.

Meanwhile, Zappfresh, another one of its competitors, is already profitable and going for an SME IPO soon.

Licious In A Nutshell

Licious is looking to get listed by 2026. The IPO processes would start next year, and the company may as well go for a pre-IPO round.

This year, the company’s main target includes achieving profitability. It aims to turn EBITDA profitable by June and fully profitable by the end of 2025. Interestingly, this would be a big leap from an INR 293.77 Cr net loss in FY24. 

Notably, the company incurred the aforementioned net loss after slashing 3% of its total 3k people strong workforce as part of a restructuring exercise during the fiscal year. A few other major cost heads were also culled to reduce the cash burn.

Now, with its focus on profitability and aggressive investments in expanding its offline footprint and dark stores for quick commerce, it will be interesting to see how Licious further cuts its expenses to the bone. 

Licious aims to close FY25 with 17% YoY growth in its top line, which translates to more than INR 800 Cr in revenue. Including My Chicken and More, the growth is projected to reach 25%, according to the founders.

While this may sound all rainbows and sunshine, the road ahead won’t be an easy one, especially when Licious’ table is full of challenges, including rival brands, profitability pressures, and shifting consumer preferences.

Amid this, it would be interesting to see Licious carve out its niche as India’s first D2C meat brand decking up for a mainboard listing. 

[Edited by Shishir Parasher]

The post Inside Licious’ High-Stakes Bet On Quick Commerce & The Omnichannel Game Plan appeared first on Inc42 Media.

India’s dream to be a major player in the global semiconductor landscape needs more funds to come true. 

Since the limited funding from venture capital firms and government subsidies is far from being enough to power this growth, the need for capital infusion from deep-pocket private equities, solvent industrialists, and rich family funds has come to the fore. More conglomerates and manufacturing companies too need to chip in to foster the ecosystem for setting up elements like supply chains, wafers, and talent pools that are integral to its development. 

It’s been slow, yet the ball has started rolling. 

From giants like Tata Technologies to four-decade-old listed integrated electronics manufacturer Kaynes Technologies, corporates have begun zooming in on the feverish pace of growth of the $33 Bn chip market in India, which is estimated to scale to $150 Bn by 2030, according to an Inc42 estimate. 

Gujarat-based Suchi Semicon makes one such example. Ashok Mehta’s rolling out of Suchi Semicon shows an unusual brand extension from textiles to semiconductors.  

If the trigger was the rapid growth of the industry across the world, then government support paved the way for driving corporate funds into the semiconductor space. As part of its INR 76,000 Cr India Semiconductor Mission, the government has been backing fabrication plants, outsourced semiconductor assembly and testing (OSAT) units, and display facilities through subsidies on land and various other components to boost chip manufacturing. 

Riding on the wave, Indian conglomerates like Murugappa Group and Kaynes Technologies decided to set up OSAT facilities in Gujarat, while international giants like Micron turned up to build fabrication plants in the country with government support.

Mehta joined the league with his son Shetal at the helm by incorporating Suchi Semicon in 2023 with an OSAT facility. The company has decided to invest INR 840 Cr (about $100 Mn) with only a 20% subsidy from the Gujarat government.

Warps ’N’ Wefts To Wafers: How Suchi Weaved Its Chip Dreams 

While a severe disruption in the semiconductor supply chain back in 2021 left most industries on edge, it also unleashed huge possibilities for Indian companies in manufacturing semiconductors.  

While narrating the journey from textiles to semiconductors, Mehta recounted how Prime Minister Narendra Modi’s words had inspired him. “Modiji said, ‘Aapda ne avsar ma badlo (make problems your opportunities), when the world was grappling with the supply chain disruptions,” he told Inc42.  

Rolled out in 2004, Suchi Industries had become one of the biggest embroidery manufacturing companies in the country by then, and was selected for the PLI scheme in 2022. By running a successful business for nearly two decades, Mehta had developed connections with markets in various overseas geographies while also gathering insight into the import-export markets.

He could soon connect to a network in Malaysia, which is the hub of OSAT plants by top companies like Infineon, OnSemi, and Motorola. And, there was no looking back. 

In 2023, Suchi Semicon started building the factory in Surat and hired the entire technical team from Malaysia. The plant was opened last December after the entire infrastructure was in place, but importing equipment on time continued to be a challenge. The company expects to start commercial production by March this year, once the equipment delivery is completed.

OSATs are third-party vendors providing assembly, packaging, and specialised testing of integrated circuits (ICs). They source wafers from the fabs and execute the designs as asked by the chip-designing companies. In the case of Suchi, its direct customers are the printed circuit board (PCB) manufacturers and the designs are suggested by them.

Suchi Semicon has partnered with a Philippines-based company for technical support, which helps it procure the equipment and other raw materials. “India’s electronics manufacturing industry is completely dependent on imports today. It’s time to make a change,” Mehta said.

Cracking The Funding Fallacy: What Makes Suchi So Confident?

Mehta said that one of the major aspects in favour of Suchi Semicon has been its low dependence on government subsidies. In fact, unlike most companies that are setting up fabs or OSAT factories in the country, Suchi Semicon chose not to depend on land allocation by the government as Mehta owned large tracts of land in the state.

Even though the company has applied for the Centre’s incentive under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), Suchi Semicon hasn’t held up its production plans for the approval.

According to Mehta, equipment cost claims the lion’s share in the cost of setting up an OSAT facility. “The Gujarat government’s 20% subsidy on building the plant infrastructure and machinery has helped us to a certain extent,” he said. 

While the major part of the funding came from Suchi Industries, Suchi Semicon also secured some credit facilities from Punjab National Bank.

Right Way To Chip In: Why Suchi Chose OSAT For Semiconductor Foray

Suchi Semicon could have entered the semiconductor space with any other business such as wafers or fabs, but it chose OSAT because, according to Mehta, this is the easiest way to begin as the broader ecosystem is yet to mature.

For instance, a fab requires a proper supply chain of various raw materials and chemicals, and India is still a few years away from building that, he said.

Suchi plans to start with assembling and testing basic small outline integrated circuit (SOIC) chips for consumer electronics such as televisions, computers, and air conditioners. In its next phase of expansion, the company will also start producing the TO-Leadless (TOLL) package used in automobiles. Infineon’s OptiMOS is one of the leading chips in this segment.

Along the way, Such will find Kaynes Semicon as its competitor in the automotive and other sectors. For the start, Keynes also has plans to supply chips to the power market.

With a capacity of producing 1.5 Lakh chips per day, Suchi Semicon has an order volume of the same capacity from one customer in the US. Mehta sees a huge gap in the market that Suchi can bridge. Its US customer, for instance, is a major player in a market that picks up 1 Mn chips a day from OSAT vendors across the world. 

As it scales further, the company aims to cater to more customers both within and outside India. The US is its biggest target market for the moment.

Suchi has also created a strong team of researchers from the IITs and NITs while it is also collaborating with several colleges and universities to train students there for hiring in the coming years.

Designing The Blueprint: How Suchi Plans To Scale The Business 

Suchi Semicon sees OSAT as its stepping stone to enter a market accelerating at 24% every year, driven by more than 100 startups that have grown over 2.4 times since 2014. To lead the race in the simmering Indian semiconductor manufacturing space, the company is setting up its in-house chip design entity, Suchi Logic, which is likely to start work in the next three months. It plans to use its own designs to make its chips market-ready as it expands the business.

On the OSAT front, the company also plans to start making quad flat no-lead (QFN) and dual flat no-lead (DFN) packages that are used for connecting integrated circuits with the printed circuit boards in mobile devices and automotive electronics.

In the next three years, Suchi Semicon aims at a production capacity of 3 Mn chips a day, catering to at least 10 customers. From 80 employees at present, the company plans to beef up its workforce to 1,000 in this period.

“Global players have their sharp eyes on India. Once two to three factories become operational, at least 40 to 50 factories will be set up in the country by international companies in the next five to 10 years,” Mehta said.

A Japanese company is also in talks with Suchi Semicon to set up a factory in India under a joint venture.

With 20% of the integrated circuit (IC) design workforce around the world coming from India and the government adding fresh thrust towards a robust ecosystem, the industry is expected to see the country zoom in on the $1 Tn market opportunity expected to be unleashed by 2030. It remains to be seen how Suchi Semicon and its domestic peers help India stay the course to reach a leading position in the global semiconductor market.

[Edited By Kumar Chatterjee]

The post Can Suchi Semicon Build India’s First Homegrown OSAT Giant? appeared first on Inc42 Media.

In the past three years what we have come to realise is that AI is set to bring in sweeping changes across industries, and naturally, the horizon for SaaS and software investors has also widened. Stellaris Venture Partners, known for its SaaS bets, including Whatfix (which is IPO bound), Revenuehero, GTM Buddy, and Slintel believes that with the AI boom, SaaS is being put through the churner as well.

Perhaps as a result of this churn, Stellaris is shifting its investment focus from horizontal to vertical SaaS and also keeping an eye on AI-powered productisation of the services economy. And finally, there’s consumer-focussed AI applications, which have gained more prominence in the fund’s thesis since the end of 2024, particularly for fintech, edtech, and healthcare. 

In November 2024, Stellaris closed its third fund at $300 Mn (about INR 2,534 Cr) from which it plans to back 25-30 startups over the next three years with a ticket size maximum of $10 Mn. A major part of the corpus is for new deals, while there will be a few follow-on rounds.

Speaking to Inc42 for our Moneyball series, Alok Goyal, partner at Stellaris, said he believes that AI has upended the notion of sector agnostic funds as well. Stellaris continues to remain sector agnostic, but AI is a persistent and strong theme in the deal flow and for nearly half of its existing portfolio. In many cases, not using AI can be an existential crisis. 

The challenge for Stellaris and plenty of other funds is to stay steadfast to the thesis even as AI disrupts the world of SaaS and sweeps up consumer software along the way. “We don’t want to build a fund where 70% is Fintech or 80% is SaaS. And there is a reason,” Goyal claimed.

Edited excerpts from the conversation

Inc42: Stellaris VP has been around for the last eight years and now you have launched your third fund. Give us an idea of how the investment thesis has evolved in the firm.

Alok Goyal: Our core thesis, call it boring, hasn’t changed much from the time we started. Our first fund was a $90 Mn fund, the second was a $225 Mn fund in 2021, and all across, our strategy has been consistent – our entry is always in the early stage, from seed and Series A. But we follow on in future rounds in these companies. 

Besides, there are a few other aspects that have remained constant for Stellaris.

Backing Only Tech & Tech-Enabled Businesses: We only back companies that are either creating technology and selling them (like software products), or are using technology to sell other products and services. The second category could be online brands, like fintech and healthtech. 

Indian Origin Is A Must: We are fishing in the India pond only, which means that one of the significant founders has to be based in India. We are not fishing in a Singapore pond, or the Middle East, or the Silicon Valley. These startups can target the Indian market or any other global market, but they need to come out of India. 

Less But More: Within the spectrum of funds, we like to be more concentrated as an entity and hence, make fewer investments. However, we go deeper into those investments and take larger ownerships from time to time.

LP Structure: We have 20 primary investors in this fund. These are all large global institutions across the US and Europe, a few in Hong Kong and Singapore as well. Most of these investors have been common across all the funds. 

Besides, in every fund that we have raised, we have always collaborated with a handful of well-known founders in both the Indian startup ecosystem and in the US to be individual LPs in these funds. We call them the Stellaris Founder Network. This group of people are also very strategic to us across the venture lifecycle in generating deal flow, doing diligence on deals, recommending their angel portfolio to us, and more. We have always kept this group of people intact.

Internal Structure: While we are agnostic within tech, as individuals, we are very sector-focused in the investment team. We don’t allow people to be generalists within Stellaris – you choose your sectors for the long haul. I have been, for example, doing software as an investor for the last 12 years, but I’ve been looking into it over the last 32 years as an operator or an investor. And that will be the DNA of most people. We have also anchored very heavily on investors with entrepreneurial backgrounds. There are five ex-entrepreneurs in our team.

Inc42: How have you adjusted to the AI wave? Have you changed your priority matrix for investments in software and even traditional sectors?

Alok Goyal: Yes some changes are happening in the way we perceive the sectors now. I’ll take it at two different levels of abstraction. 

In terms of broad sectors that we look at, like SaaS, Fintech, or consumer tech brands, again, nothing has changed. Sometimes the relative emphasis may change. 

For instance, the kind of SaaS companies that we would be funding from our first fund, versus the kinds of companies or teams that we are chasing in the third fund, are different. Historically, we were slightly more bullish on horizontal SaaS because of the growth outcome they had and the return they generated. With AI coming into the picture, we see that changing. Unlike before, the bulk of our bets today are more vertical than horizontal in nature.

Take the example of our investment in CARPL, which is in the radiology AI space. If a hospital has a single X-ray machine, there is a need for different algorithms to study different health issues in each kind of X-ray, be it chest, head, wrist, or any other organs. So, these hospitals need an integration hub that actually connects with scan-generating machines and scan-viewing machines with these AI algorithms. That’s what CARPL does. This shows the huge opportunity in the vertical SaaS market.

In general, if I look at AI as a theme over the last five years, its intensity has actually grown substantially. From our first fund, we had two native AI companies – MFine and Signzy.

When we moved to Stellaris fund two, we began to see a lot of AI natives emerging. We also built a thesis at the end of 2020 and published it with the World Bank that said AI was not just going to remain a feature to be added to existing software. We believed that it would allow companies to completely rethink the applications or the underlying processes themselves. We backed CARPL and OrbitShift based on that thesis.

Now, it’s evolving further.

Inc42: How would you encapsulate your current AI investment thesis?

Alok Goyal: Broadly there are three things in AI on the enterprise side that we are bullish on.

Enterprise Applications: We believe this domain will be reimagined and rethought almost across the board. And unlike what the popular narrative is, we believe that startups are going to lead the way here, not the existing larger software companies. Larger companies will build incremental features but they will not fundamentally re-imagine the process. More likely than not they are going to be vertical applications because they need to be narrow to guarantee the kind of accuracy that enterprises are looking for.

Developer Tools: We believe that the world of software development itself is changing with AI. The whole software life cycle – from when you create your requirements, build the front end, do coding, write the test cases and run them, deploy the software, and continuously monitor right through observability – will change substantially. The world today has 30 Mn developers. Tomorrow, the world will have a billion developers, people like you and I will be able to build applications. Therefore, we are very bullish on the AI tools that are used in the software development process. Kombai from our portfolio is one such example. 

AI Product-Led Services: Historically, we have divided the world of software from the world of services. A software company doesn’t like to do services, they find them to be scalability inhibitors and margin reducers. Whereas services companies also work in a set model of delivering services on demand. The interesting thing with AI software is that despite all the goodness of AI, it will always have errors and will hallucinate. So, we believe that if one can combine the AI software with accompanying services that guarantee the accuracy of the outcome that the software is creating, that’s very powerful. Not a whole lot, but since the beginning of last year, we have been evaluating a bunch of companies and keeping an eye on them.

The deal flow on the consumer side of AI has taken more time than AI on the enterprise side, but good consumer applications are coming up today. We see a lot happening on the content generation front with GenAI. Interesting applications coming up in edtech, fintech, healthtech.

Meanwhile, an interesting stat, if you look at our overall deal flow as a firm, these 40 to 50% of our portfolio companies will not even exist without a very deep use of AI in the product or service that they are providing. 

Inc42: Does that mean Stellaris is putting more focus on AI? and increasing allocation for the sector?

Alok Goyal: We are not. We don’t reallocate money to any sector. 

We have adopted two principles here. One, we want to be bottom-up and want our capital to go to the best teams where the sector doesn’t matter.

There is only one expectation of that, which is rule two, we do not want our portfolio to get overly skewed in one particular space. We don’t want to build a fund where 70% is Fintech or 80% is SaaS. And there is a reason.

Our industry goes through hype cycles for different sectors all the time. There are troughs as well for every sector. If our portfolio gets overly skewed in a single space, there will be an undue risk to the portfolio.

To give an instance from our first fund, when COVID-19 happened there was a massive hit in all our mobility and logistics companies whereas our healthcare companies saw an upshot. We always take these macroeconomic scenarios, headwinds and tailwinds into consideration.

Inc42: Besides AI, do you see room for investments in deeptech verticals – robotics, semiconductor, spacetech, biotech, etc?

Alok Goyal: Are we looking at some of these sectors for investments? Yes, we have also probably met most of the companies. However, we have found that there are a few different factors which make these bets risky.

• Long gestation period, which means longer to get to a real product and generate revenue
• Besides, the hardware ecosystem in India is actually not as well defined, and that is reflected in the quality of talent, availability of parts and manufacturing expertise.

Now, it’s not about liking or disliking a sector. We underwrite the risk and the reward and try to see if the equation makes sense for us or not.

Despite the risk of a long gestation period, if we find a team and a market where the reward makes sense in the end, we will evaluate.

Inc42: And what does due diligence look like at this stage?

Alok Goyal: As an early-stage investor, we look at both the founding team and the market opportunity or the problem that they are solving. Hence, we ask two broad questions: is this a problem worth solving? And is this the best team to solve that problem?

Now, if it’s a seed-stage startup, we are more focussed on the founding team. With Series A, we look more into the problem that they’re solving and their execution track record. 

We are famous in our industry for very deep diligence. Since we also do very few investments, we are very selective. We don’t believe that conviction comes out of thin air. Hence, we spend time talking to their customers, prospects, and experts. We do an insane number of reference checks on the founders and spend time just to know them. We believe it’s a marriage and not a transaction.

It takes us anywhere from two to four weeks to do due diligence on a company.

Inc42: How do you see 2025 shaping up for the PE and VC ecosystem?

Alok Goyal: It’s been a more positive environment for India driven by multiple factors. One is that I think India today stands out as very few countries that haven’t had a misstep, which has attracted more capital. It has also been aided by the fact that a lot of capital has been pulled out of China.

Earlier, everybody used to also complain that India has not shown exits. But we have now generated a lot of liquidity as an ecosystem over the last few years, which has been very positive for India.

In the last six months, early-stage investments have gotten much better in terms of deal flow and the quality and quantity of deals. The late stage has started opening up but not as much.

Certain themes tend to take primacy in every cycle. In 2025, AI will be a very large one. And as I said, there will be one shift from last year where we do expect a lot more AI in consumer tech than we have seen in the past.

[Edited by Nikhil Subramaniam]

The post Stellaris’ Alok Goyal On How SaaS Bets Are Evolving In The AI Boom appeared first on Inc42 Media.

Riding the Agentic AI wave, proptech unicorn NoBroker has launched ConvoZen.AI, a conversational AI cloud designed to enhance the monitoring and automation of customer conversations.

During its launch event in Bengaluru on Tuesday (February 25), NoBroker demonstrated the capabilities of ConvoZen.AI’s voice agents that have human-like tonality with low latency and features such as the ability to transcribe calls and provide insights of the calls that could help businesses make better analyses of agent-customer interactions and in-depth customer research.

ConvoZen.AI also has Indic language capability. Currently, it can converse in four Indian languages – Hindi, English, Tamil, and Kannada – and analyse data in nine languages.

Available as a SaaS product, the conversational AI cloud has been tested across a range of complex use cases within and outside of NoBroker, the startup said. The platform already serves around 20 clients across sectors, including BFSI, education, healthcare, automotive, and others. 

NoBroker claims to have demonstrated ConvoZen.Al’s capabilities at Cars24, LendingKart, LeapScholar, Tata AIG, TBO Tek, and Cureskin, among others, to help them reduce costs, improve sales conversions, ensure compliance, and boost agent efficiency.

The development comes more than a year after the launch of NoBroker’s previous conversational AI platform, CallZen.AI. Taking a step ahead with Agentic AI capabilities, ConvoZen.Al offers a suite of features, encompassing voice and non-voice agents, analytics, monitoring, coaching, and quality control for large customer-facing teams. 

Speaking to Inc42, Akhil Gupta, cofounder and chief product and technology officer of NoBroker, said that the startup has been working with AI and ML models since 2017 to transcribe in-house customer calls with its human agents. However, those models did not have Indian language capabilities, which led the proptech startup to gradually start working on its own small language models (SLMs). 

ConvoZen.AI was also initially used in-house by NoBroker to address critical operational challenges. Over the last three to four months, the startup has accelerated the deployment of the platform with other companies. 

He believes that the integration of Al in customer engagement is no more a luxury but a necessity.

NoBroker has also partnered with Google and Microsoft to sell ConvoZen.AI as independent software vendors.

On the technology front, ConvoZen.AI has been built using multiple AI models, including its in-house SLMs and other foundational models, including Google Gemini.

The startup claims that its own models are trained on more than 45,000 hours of actual customer service centre conversations.

Founded in 2014 by Gupta, Saurabh Garg, and Amit Agarwal, NoBroker is a proptech platform that allows users to buy, rent, and list properties without any brokerage fees. It also offers other services such as packers and movers, rental agreement services, and painting and cleaning of houses.

Gupta said that ConvoZen.AI, with its agentic AI capabilities, can now analyse conversations on a real-time basis and remove a property from its platform without any human intervention as and when it hears a human agent interacting with the property owners about it or if a customer reports that the property is rented out.

At NoBroker, the startup claimed, the platform has not only increased efficiency but also reduced the work of the human agents that were involved in more mundane tasks.

However, Gupta told Inc42 that this automation didn’t lead to any layoffs as the startup moved the employees to different roles. Besides, this also enabled the upskilling of its several existing human agents.

The development comes at a time when Agentic AI is the latest buzzword in the GenAI ecosystem. Recently, conversational AI platform Gupshup also launched its AI agent library of 15 pre-built and customisable AI agents.  Foodtech major Zomato launched Nugget, an AI-native, no-code customer support platform. Built with the capabilities of AI agents, the platform claims to resolve up to 80% of queries autonomously.

Besides, the likes of Google, Microsoft, and other big tech companies are working on making AI smarter and more autonomous to reduce their human dependence. Indian IT giants are also leveraging Agentic AI to boost their revenues.

Amid the GenAI foray, NoBroker is also aiming to turn profitable in the next 12-18 months. However, the startup has no plans to take the IPO route any time soon given profitability is its focus right now.

The post NoBroker Launches Conversational AI Platform ConvoZen.AI For Enterprises appeared first on Inc42 Media.

The last few years have seen an exponential growth in the global tech landscape. While human dexterity has multiplied manifold with the advent of Generative AI, the world has also been plagued by a digital pandemic known as deepfake. 

The threat is real, and AI experts are urging everyone leveraging the emerging tech, from intelligence and law enforcement agencies to banks and other institutions, to be a step ahead in keeping malicious attackers at bay. 

Despite this, there isn’t enough awareness around deepfake, which raises a key question — Are we doing enough to nip this digital demon in the bud? Well, not exactly. 

A recent PR stunt by the President of France, Emmanuel Macron, where he used AI-generated deepfake videos to publicise the commencement of the AI Action Summit in Paris, rather demonstrates that we have been trying to normalise the use of deepfakes, eventually blurring the lines between what’s real and what’s not.

Back home too, the deepfake menace is growing without bounds, unabated, and unchecked. Deepfake videos of eminent businessmen Mukesh Ambani or Narayana Murthy promoting various fraudulent trading platforms could be easily found doing rounds on social media platforms and WhatsApp groups.

Amid this, a recent report by Pune-based deepfake detection technology provider, pi-labs, underlines that the country’s BFSI sector, in particular, is exposed to the growing threat of deepfake.

Anticipating dangers that could be lurking ahead, the 2023-founded GenAI startup is endeavouring to help the global BFSI sector see through the smoke and mirrors by unmasking deception with its deepfake detection technology stack.

Founded by Ankush Tiwari, Abhijeet Zilpelwar, and Raghu Sesha Iyengar, pi-labs is building autonomous AI agents for deepfake detection, video analytics, and cybersecurity to save the BFSI sector from deepfake attacks.

But why BFSI?

Well, CEO and founder Tiwari feels that there is a significant lack of awareness about deepfakes among banks and enterprises.

Besides, the company’s report shows that before 2000, cyber frauds in India were largely restricted to prank videos and celebrity spoofs. By 2003, incidents of political manipulation and influencer-targeted pornography started coming to light. 

Lately, cybercrime has largely become about financial frauds and scams around fake video KYC and digital arrest. From identity theft, loan fraud, money laundering, and manipulation of digital banks to fraudulent investment scams, the BFSI sector faces a tremendous amount of risk and potential losses due to deepfake.

It projected that India is on the verge of losing INR 70,000 Cr in 2025 alone to deepfake frauds. 

At a time when there is a growing emphasis on Sovereign AI for India to be fully reliant on its own tech stack across the AI value chain, pi-labs has intensified its fight against deepfake.

Behind pi-labs’ Inception Story

All three founders of pi-labs carry decades of deeptech experience under their belt. Tiwari’s previous venture, Mobiliya Technologies, specialised in building mobile devices for defence use cases. Here, Zilpelwar was the VP of technology and Iyengar engineering director.

When Tiwari exited Mobiliya in 2019, after its acquisition, he knew that the next big technology opportunity was in the AI space. 

As a tech entrepreneur, who has been developing tech for defence use cases, he decided to build a defensive stack to be ready from the early days as AI became mainstream.

“We have a simple philosophy. As new exponential tech emerges – which used to come every seven to eight years and now comes every five years, and going forward this time frame might get shorter – independent of the tech, cyber security is a constant. When quantum computing becomes big, cyber security needs are still going to be there,” said Tiwari, highlighting his thought behind incorporating pi-labs.

After its incorporation in 2023, the startup remained in stealth mode for a year. It came out in 2024 with its deepfake detection products — Authentify, pi-scout and pi-sense.

The startup claims to be the largest deployer of deepfake detection technology in the country. According to the CEO, the country’s BFSI space is too vulnerable to cyberattacks. Therefore, they are currently deploying their products with central and state law enforcement agencies in the country, including defence organisations. Currently, it serves eight such bodies.

According to the founder, the startup’s tech stack can detect manipulated content in any format—video, audio, images, and text. Besides BFSI, the bootstrapped startup is also looking to cater to HR use cases.

pi-labs’ Tech Stack

The startup first built Athentify, which it calls an “AI++-powered platform” that can detect and analyse deepfakes in different media formats. It uses multiple advanced AI algorithms to help its users identify synthetic content and fraud attempts using deepfakes.

This AI-powered platform is capable of analysing various signs of manipulations, including subtle inconsistencies in lip synchronisation, facial movements, voice patterns, voice clones, and more, hence raising alarms on any attempts of deepfake frauds.

“In short, we are using AI to beat AI, that’s our theme,” said Tiwari.

Besides, the startup’s other product, pi-scout, is a forensic AI agent that helps intelligence agencies get more detailed reports from various kinds of structured and unstructured data.

Explaining the tech, Tiwari said, “If you see any criminal investigation programmes today, most of these start with mobile phone data – call records, location data, pictures, CCTV footage, and bank statements. All these are various kinds of data. Now, how do you put all these together and make sense of them? So, you can think of pi-scout as a forensic AI agent.”

pi-sense does almost the same thing but decoding videos. It’s a video forensic analytics platform.

“In India, every forensic lab is sitting on a pendency of a few years, just because there are not enough people (who can work on them). And imagine that if a CCTV video analysis takes one hour, these forensic labs get videos of thousands of hours in a week in a lab. This is where we are using AI to help remove pendency,” said Tiwari.

Meanwhile, pi-labs claims to stand out from the competition with the use of India-specific data. Currently, its products support 15 Indian languages.

“If you look at any AI agent and ask whether it is a drug or not, it will not be able to be identified. If there is a picture of a murder, most LLMs will refrain from responding to that, but at pi-labs our job is to make sure our LLM plays that. Our problem starts from there,” Tiwari said.

Giving an interesting example, he said that if there is a drug investigation in Punjabi, AI must know the word Chitta, a synthetic drug made from heroin. No LLMs today can crack the word, but the way pi-labs has customised the LLMs to build its products, it can detect such words.

The Path Ahead For pi-labs

Largely catering to law enforcement agencies in the country, pi-labs is now also looking to onboard a few enterprise customers this year. International expansion is also in its playbook in 2025.

Currently, the startup is in talks with a few companies in the BFSI sector in North America.

Overall, the startup expects to grow its customer base to 20 by the end of the year. With this, it also expects to see a 3X jump in revenue from FY24 to FY25. However, the company did not reveal its revenue figures.

As AI evolves rapidly, cybersecurity experts, institutions, and governments face mounting challenges. The global deepfake AI market is projected to grow at a CAGR of 44.5%, surging from $564 Mn in 2024 to $5,134 Mn by 2030.

The Indian government’s INR 10,372 Cr IndiaAI Mission stresses the need to ensure ethical AI. As part of it, MeitY has sought proposals from startups and other relevant stakeholders for building AI-powered tools to detect deepfakes. 

But to fight deepfake at its root, every institution has to become more vigilant, there is a need for more native AI companies to build deepfake detection tools. Though efforts have begun, India still lacks the necessary infrastructure. 

This is where companies like pi-labs have a crucial role to play. With a strong hand-holding with its competitors like Kroop AI and Europe-based Sentinel AI, pi-labs is sitting on a mine of opportunities going ahead. For now, can pi-labs help the BFSI sector fend off the deepfake menace with its AI arsenal?

[Edited By Shishir Parasher]

The post Can pi-labs Fend Off Deepfake Attacks With Its AI Arsenal? appeared first on Inc42 Media.

Proactiveness. That’s how Enver Cetin, an AI expert at global Experience Engineering firm Ciklum, described Agentic AI in a Harvard Business Review article. 

Agentic AI – the next big thing in the AI ecosystem the country will see in 2025, as Inc42 called it last December – is indeed driving us into yet another phase of transformative growth. And, all this is happening barely two years after Generative AI (GenAI) changed how industries function and individuals work, and the need to improve its resolution process and customisation was felt, accelerating the natural evolution of technology. 

AI companies are actively building autonomous AI agents to help their enterprise and startup clients improve customer satisfaction. Many startups are also building in-house AI agents to help enhance the processing of ticket requests, reduce the need for human agents, and so on. From Gupshup to Zomato, Infosys to Zoho Corporation – Agentic AI has become a major focus for companies no matter how big or small they are or in which sector they operate in.

The rapid waves triggered by Agentic AI have fostered a $5.1 Bn market around the world, which is on course to surpass $47 Bn by 2030, averaging more than 44% growth rate. Reports suggest India has a high AI adoption rate, with some stating it accounts for around 40% of global AI agent deployments. 

But, what is Agentic AI and how is it making companies smarter? We often see ‘AI agents’ and ‘Agentic AI’ being used interchangeably. Are they really the same?

Let’s understand the concept first.

What Is Agentic AI?

To put it simply, Agentic AI refers to autonomous GenAI agents that are capable of doing complex tasks with little or no human supervision.

These autonomous GenAI agents are more sophisticated in their ability to take actions, and hence, solve more complex tasks compared to what AI assistants could do. The earlier avatar could solve specific tasks such as writing emails or providing customer support, but the advanced version can handle complex tasks such as planning your next vacation, making travel arrangements, taking care of the elderly with human-like bots, and resolving supply chain issues by smarter management of inventories.  

The foundation and the backbone remain the same where the open-source or closed-source large-language models (LLMs) are fine-tuned, but they are enhanced with more context and intelligence to analyse and resolve issues independently.

Krishna Tammana, chief technology officer at Gupshup, said that the power of language models and their ability to reason and give answers to questions is already established. “GenAI has advanced quickly over the last two years, bringing in a dramatic improvement in the quality and performance of all these models, including the foundation models,” he told Inc42. 

But answering questions by using its reasoning power, logical inputs, and knowledge and information base isn’t enough, he said. There’s a desire to go beyond this and take action on behalf of humans. Such actions could vary from ‘pay my bill’ and ‘buy me a ticket’ to ‘disable my credit card’ and ‘book a doctor’s appointment’.

GenAI-based assistants could address such requests earlier as well, but their actions were limited, which eventually called for human intervention to address customer-specific queries. Agentic AI is making clear transformations there with its autonomous and intuitive nature.  

“Once you have a piece of technology that can answer a question, the next thing you can ask the technology to do is, perform an action. There have been a few efforts earlier. For example, there was an effort to create something called ‘large action models’. The idea was the same. Then came agentic models. Why is the name? Because they behave like human agents to perform tasks and actions that you would want them to perform. I see it as a natural extension. Think of it as something on top of LLMs, or as an extension, or the next step where the LLMs function,” Tammana said.

Although Agentic AI and AI agents are often used to mean the same thing, there are subtle differences. These terms are, however, used more loosely and vary in how each company defines them.

Agentic AI Versus AI Agents

Agentic AI is the broader concept of solving issues with limited supervision, while an AI agent is a specific component within that system that is designed to handle tasks and processes with a degree of autonomy. That’s how IBM describes the two levels of artificial intelligence. 

The Big Blue sees Agentic AI as the technology that can manage and run the overall energy consumption system in a smart home. It uses real-time data and user preferences to coordinate individual AI agents such as the smart thermostat or any other appliances. The agents have individual goals and tasks and they work together within the agentic AI framework to achieve the homeowner’s energy goals.

While the definition might look simple, an Inc42 research gathered that the industry is yet to come to a solid conclusion on their true use.

Anthropic, which focuses on developing GenAI systems and LLMs, wrote in a recent blog post that some customers define ‘agents’ as ‘fully autonomous systems that operate independently over extended periods, using various tools to accomplish complex tasks’. Others use the term to represent more ‘prescriptive implementations that follow predefined workflows’. 

“At Anthropic, we categorise all these variations as agentic systems, but draw an important architectural distinction between workflows and agents,” said the post.

“We can think of ‘agents’ as those encompassing a few elements. There are LLMs that give us the natural language processing (NLP) capabilities. There is memory associated with these agents and data stores that provide the context. Besides, there are tools such as APIs and workflow automation and AI capabilities like summarisation, anomaly detection, and forecasting. And, by Agentic AI, we mean these capabilities of the AI agents are put together,” Sujatha Iyer, who heads AI security at ManageEngine by Zoho Corp, said.

India In Agentic AI Age

The biggest use case for Agentic AI in India is the conversation bot. Whether it’s in text-to-speech or speech-to-speech, companies building AI agents are trying to offer Agentic AI solutions tailored to the needs of their customers.

Conversational AI platform Gupshup recently launched its library of 15 pre-built and customisable AI agents. It is providing its Agentic AI capabilities to startups like Lenskart and Cars24, as well as to companies like Kotak and Tata AIA in the financial sector.

Gupshup’s Tammana explained that in the past, the company could offer very rich conversations to its customers that were powered by LLMs, but when it came to taking actions, it had to hand code them.

“For many banks, we had implementations where we hand-coded actions when customers asked ‘show me the balance’ or ‘disable my credit card’. Now, with Agentic AI, we not only do those things faster but also have more sophisticated reasoning and logic to make the decisions for each customer, make recommendations and take the customer through the journey of actually performing that action,” he said.

While earlier it used to take four to six weeks for its clients to resolve some complex issues, now it takes only three to four days, according to him.

With AI agents making deeper inroads into Corporate India, Zoho Corp came up with an AI-powered platform, Zia Agents, to bring autonomous agents into business workflows. It also introduced Zia Agent Studio, a no-code or low-code platform that helps businesses create autonomous agents designed to their needs.

Zomato CEO Deepinder Goyal took to social media this week to announce the launch of Nugget, an AI-native, no-code customer support platform. Built with the capabilities of AI agents, the platform claims to resolve up to 80% of queries autonomously.

Infosys recently told Inc42 that the company is building over 100 GenAI agents for client applications in collaboration with its AI partner ecosystem. 

While Hyderabad-based startup Pulse raised $1.4 Mn in seed funding last November to build its Agentic AI platform aimed at SaaS product teams, Atomicwork raised $25 Mn in January as it aims to transform IT service management with its Agentic AI platform.

Speaking to Inc42, Pranav Patil, chief data scientist at AdvaRisk, a startup that helps banks with end-to-end collateral management through its GenAI-powered data intelligence platform, shared that early adoption of Agentic AI will largely be on the customer support front because risks are lesser.

The adoption in algorithmic trading and in improving loan disbursement and loan processing is taking place slowly in the BFSI sector, he said.

Will Agentic AI Have Hallucinations In Check?

Sometimes an LLM, which could be a generative AI chatbot or computer vision tool, perceives patterns or objects that are nonexistent or imperceptible to human observers, creating outputs that are nonsensical or altogether inaccurate. Such fallouts are called AI hallucinations, said an IBM blog post.  

The problem of hallucinations surfaces even in Agentic AI, calling for the need to put up guardrails around the models.

Tammana, however, sounded confident about the high degree of sophistication in an autonomous agent. “Earlier, we had to encode every rule, so what we could build before was rule-based systems, as opposed to intelligent thinking systems now.” 

ManageEngine’s Iyer said that there has to be a lot of output engineering to reduce hallucinations, and this is where Retrieval Augmented Generation (RAG) system and reinforcement learning can help.

In this rapidly evolving age of artificial intelligence, it now remains to be seen how Agentic AI writes the next major story of customer success in enterprise use cases or if it can go far beyond its current capabilities to improve domains in more business tasks.

[Edited By Kumar Chatterjee]

The post From Zomato To Infosys: Why India’s Biggest Companies Are Betting On Agentic AI appeared first on Inc42 Media.

The year 2070 may appear a long way, when India has pledged to go net-zero on emissions, but the country is going at full throttle along the course. Ethanol has come up as a sustainable solution to lower the economy’s dependence on fossil fuels and cut down the cost of petrol imports. 

Under the National Policy of Biofuels 2018, India had set a target of 20% ethanol blending in petrol and 5% biodiesel blending in diesel by 2030. The ethanol blending target was later advanced to 2025. Two months into 2025, India has achieved up to 19% ethanol blending target, Prime Minister Narendra Modi said at the third edition of India Energy Week in Delhi. “India will achieve its 20% target by October.” 

India’s biofuels industry, too, is set for rapid acceleration, with 500 Mn tonnes of sustainable feedstock. “The growth in ethanol blending has led to forex savings and generation of substantial farmer revenue,” Modi said. 

The government’s push for a cleaner, greener India has set the electric vehicle industry too in the fast lane to surpass $132 Bn by 2030, according to a recent Inc42 study — India’s Electric Vehicle Startup Landscape Report, 2025.

As India accelerates its double-engine transport of ethanol and electric vehicles, the way to 2070 doesn’t appear that long.

Ethanol And India’s Evolving Automobile Landscape  

Ethanol is a biofuel produced from the fermentation of sugar by yeast or from petrochemical processes like ethylene hydration. It is used as an alternative fuel source in automobiles, as a solvent in paints and varnishes, as antiseptic and disinfectant in drugs, and as an ingredient in alcoholic beverages.

According to the India Climate & Energy Dashboard, until FY23, 46.5% of ethanol was produced in the country from B-heavy molasses, 1.1% from C-heavy molasses, 25% from sugarcane juice or sugar, and the rest from sources like maize, rice, and damaged food grains.

By FY24, India reduced its reliance on B-heavy molasses to 23.4% for ethanol production and raised it to 9.2% on C-heavy molasses and 39.6% on maize.

In simple terms, molasses is the syrup or juice obtained while extracting sugar from sugarcane or other sources of sugar. B-heavy molasses and C-heavy molasses are derived in two different stages during the extraction process, and hence, they differ in terms of sugar concentration and flavour.

The ethanol production capacity in India has increased more than 2.5 times and the number of distilleries increased 66% in the last two years.

In the automotive industry, the adoption of ethanol has been slow. Government data suggests that as of March 2024, around 98% of the fuel used in the road transportation sector came from fossil fuels, while only 2% came from biofuels like ethanol.

Some recent developments indicate the evolving dynamics in India’s automobile fuel space. Honda Cars India recently announced that it achieved E20 (20% ethanol blended) compliance across its product range, including Elevate, City e:HEV (hybrid electric vehicle), City, and Amaze models. The move aligns with the government’s mandate that requires all gasoline-fuelled mono-fuel and bi-fuel vehicles with positive ignition engines, including hybrids, to meet the E20 fuel compliance standards.

During Auto Expo 2025, Toyota showcased its Prius FFV-PHEV (the flex-fuel vehicle-plug-in hybrid electric vehicle). This car is equipped with a 2-litre petrol engine capable of running on both petrol and ethanol, as well as an electric motor and a 13.6 kWh battery.

Preeti Dharmagoudar, cofounder and director of product strategy at precision fermentation startup Fermbox Bio, told Inc42 that E20 adoption in automobiles will be the biggest driver of ethanol demand in India, but ethanol has significant potential beyond fuel, particularly in industrial solvents, chemicals, and sustainable aviation fuel.

International Air Transport Association (IATA), an airline trade body, said India has the potential to be a key producer of sustainable aviation fuel (SAF) with the help of its ethanol supplies and lipid feedstocks like non-edible industrial oils. Indian carriers too have operated some flights with a blend of SAF and traditional Aviation Turbine Fuel (ATF).

Ethanol Or EV? A Combination Of Both

As both the engines rev up for India’s net-zero mission, one wonders which is the more powerful driver – ethanol-blended fuel or electricity as fuel.   

A recent Inc42 analysis suggests that ethanol has a few benefits over EVs, including lower transition costs and quicker deployment. 

Unlike EVs, vehicles compatible with ethanol blends, like flex-fuel engines, do not require a complete overhaul of the existing infrastructure. Ethanol-blended fuel can be used in conventional internal combustion engine vehicles with a few modifications, which makes it an economical option for adoption.

On the other hand, it takes a long time and heavy investment to build a robust EV infrastructure, especially the charging and battery swapping stations. 

Ethanol is often considered more environmentally friendly. It not only burns cleaner than traditional fossil fuels, but also doesn’t involve mining of rare-earth metals used in the production of EV batteries. According to the US Department of Energy, bioethanol is 20-30% more economical than crude-based oil fuels with zero carbon emissions. Setting up the production and distribution network for ethanol too can be done faster and at a lower cost. 

Sandiip Bhammer, founder and managing partner at Green Frontier Capital, said that although ethanol reduces carbon emissions, it raises concerns about land use, water consumption and production emissions. 

“EV sustainability depends on grid decarbonisation and battery recycling. As India’s grid becomes greener, EVs will be the cleaner long-term solution, while ethanol will play only a supporting role in reducing fossil fuel reliance,” Bhammer told Inc42.

The debate, therefore, is not about which one is more powerful. It is perhaps a combination of all sustainable energy solutions that can effectively reduce India’s and, largely the world’s, dependence on fossil fuels causing climate change.

Road Ahead For Ethanol In India 

Despite picking up momentum, India lags behind Brazil and the US in terms of bioethanol use, largely because of constraints in the supply of raw materials and lack of infrastructure. Brazil has vehicle engines running on 100% bioethanol (E100), while the US and Sweden have E85 and are ethanol flex-fuel vehicle markets.

As per Bhammer, India lacks enough raw materials diversity, flex-fuel vehicles and ethanol refuelling infrastructure. Policy incentives are strong but challenges include price volatility and competition with food crops.

“While Brazil has widespread flex-fuel adoption, India still relies heavily on sugarcane-based ethanol, raising sustainability concerns. Expanding to second-generation biofuels is crucial for long-term viability,” he said.

India’s ethanol initiatives encouraged oil and gas companies to invest INR 14,000 Cr to set up 2G refinery plants for making bioethanol from cellulosic and lignocellulosic biomass, including petrochemical routes. While these initiatives are expected to increase bioethanol production in the country, there are scopes for more infrastructure building and policy revamps.

Bhammer believes that the biggest opportunities for ethanol production exist in alternative feedstocks like agricultural waste and second-generation biofuels. Besides, clearer flex-fuel policies and more private sector involvement would also accelerate ethanol adoption.

Fermbox Bio’s Dharmagoudar believes that the government has laid out policies to support the ethanol industry, but key hurdles such as ensuring stable pricing support remain until the sector reaches its full viability. “India also needs policy changes to let the domestic startups compete in tenders, especially in the 2G enzyme sector, where they lack preference, restricting competition and innovation,” she said. 

“Expanding its applications beyond transportation, along with policy support to boost domestic production without affecting the food supply, can drive broader adoption, economic value, and a more sustainable circular economy. This diversification can also reduce reliance on the automotive sector and create additional demand across industries.” 

As per the Ministry of Petroleum & Natural Gas, for the country to achieve the target of 20% ethanol blending by this year, India requires about 1,016 Cr litres of ethanol, while the total demand for ethanol, including other uses, is estimated to be around 1,350 Cr litres. 

To meet this requirement, an ethanol production capacity of about 1,700 Cr litres must be set up, assuming the plants operate at 80% efficiency, the ministry said last October.

It now remains to be seen if India, with its own hurdles and as a country with huge access to raw sugar sources, can scale ethanol production and deploy it as effectively as it paved the way for EVs to zoom.

[Edited By Kumar Chatterjee]

The post India’s Push For Green Fuel Unravels Gold In Ethanol appeared first on Inc42 Media.

Have you ever heard about 55 Cancrie? Discovered by NASA in 2004, the exoplanet, located about 41 light-years from us, is made of diamond (one of the purest forms of carbon) and is nine times the size of Earth. 

Back home, a Jaipur-based startup took inspiration from this distant cousin of our planet to start its journey of building nanocarbon for batteries.

Founded in 2020 by Akshay Jain and Mahi Singh, Cancrie has developed an in-house technology to produce nanocarbons for batteries with various cell chemistries. 

However, besides its name, what’s interesting is that the startup uses coconut shell waste to produce nanocarbon. With its coconut shell-powered technology, Cancrie claims to offer enhanced battery performance and lifecycle while contributing significantly to sustainability.

Amid the ever-growing size of the country’s lithium-ion battery, which stood at $3.2 Bn last year on the back of growing penetration of EVs and consumer electronics, Cancrie wants to make the most of this opportunity with its trademark-pending carbon powder.

Making Of The Magic Powder, Cancrie  

Cancrie’s founder and CEO Jain is a chemical engineer. While pursuing his PhD at the National University of Singapore, he was part of a project that required waste upcycling to make products such as fertilisers, low-cost adsorbents, and low-cost fuels.

After almost one and a half years of research, he developed high-quality nanocarbons from waste that could be used in batteries.

Now that Jain had the product ready, the only thing barring him from embarking on his entrepreneurial journey was proving the commercial viability of his nanocarbons. 

With a dream of aiding the battery industry with enhanced technology, Jain joined forces with Singh, who packs years of experience in sustainability and the startup ecosystem under her belt.

“After almost four and a half years, several industrial and field trials, many failures and pivots, we have started selling the carbon powder to our customers,” said cofounder and CEO Jain, who initially envisioned his nanocarbons being used at water treatment plants.   

However, he soon understood that the industry was not yet ready to pay for the premium quality carbon that the startup had to offer. Therefore, they tried their hands in a different sector. 

They found their luck in the battery industry, as many were ready to pay a premium for the compound that promised to increase the efficiency and lifespan of their batteries. 

But this was just the beginning of a tougher road ahead, as the initial product was more suitable for lithium-ion (Li-ion) batteries. The happiness, however, was short-lived as manufacturing of Li-ion batteries had yet to pick up.  

“Li-ion cell manufacturing did not begin in India back then and all India-assembled batties had imported cells. Even today the market is almost nil,” Jain said.

The founders pivoted to explore the huge lead acid battery market in India. After revamping their compound, the founders began selling it last year. 

The revamped compound was even more explosive, not literally though.

“Cancrie-filled batteries showed 25% to 30% higher lifecycle compared to other batteries,” Jain said. 

The startup claims to have sold 50,000 Cancrie-tweaked batteries so far. Currently, it caters to five lead acid battery manufacturers. It has found the biggest application (around 70%) of its product in electric rickshaws, a large portion of which still runs on lead-acid batteries. Besides, it also deployed the material for solar and UPS applications.

Since its inception, Cancrie has raised $1.5 Mn in total funding from Roots Ventures, IIMA Ventures, and SIDBI, among others.

From Coconuts To Batteries

As mentioned earlier, Cancrie generates nanocarbon from coconut shell waste, which is produced after the waste undergoes a six-step treatment process.

Jain said that his team tweaks the compound produced as per various parameters — surface areas, pore sizes, pore volumes, conductivity functionalities, particle sizes, and purity levels — to determine battery performance.

“This is where we differentiate ourselves in the market. We tweak these parameters and make it very unique for the different batteries,” Jain said. 

The founder claims that with Cancrie nanocarbon in them, used in making lead-acid plates, batteries do not lose much current in the form of heat, thereby increasing efficiency and life. It also helps save electricity while charging.

Currently, the startup has only commercialised its technology for lead acid batteries, but it is also doing industrial trials for Li-ion batteries. 

In Li-ion hybrid batteries, Cancrie has been able to replace almost 80% of the cathode with its material, leading to better energy density and high power density in these batteries. 

“This innovation would have significant benefits for peak power accelerations and regenerative braking in electric two-wheelers, hybrid EVs, and drones,” cofounder and COO Singh said.

Cancrie is developing another technology to replace around 10% of lithium iron phosphate (LFP) cells with its nanocarbon compound. The startup is also working on developing nanocarbon for sodium-ion batteries, which is currently at an early stage.

Cancrie’s Capacity Expansion Plans

Currently, the startup produces the compound in a small batch of about 50 kg per month. It is looking to expand its current capacity by 10X. It plans to further double down to one tonne per month by the end of 2025.

“We already have a total purchase order for two tonnes per month, but we are taking it slow,” said Singh.

Cancrie is also working with a few MSMEs and plans to add around three to four more customers in the coming months.

Meanwhile, it claims to be able to provide $400K per Gwh savings for battery manufacturers with Cancrie materials. It is also trying to tap into one of the major battery manufacturers for lead acid in the US.

A few important grants, from The United Nations Industrial Development Organization (UNIDO) and India’s Bureau of Energy Efficiency and a few international collaborations with the likes of The New York State Energy Research and Development Authority (NYSERDA), are expected to help Cancrie forge its path ahead in both domestic and international markets.

With a global demand surge towards sustainable energy, Cancrie’s attempts to improve the existing battery industry could be viewed as a way to neutralise the centuries of damage made by the mining industry to cater to the rising demand for power. 

With global players like Haycarb and Cabot already working on developing sustainable nanocarbons for batteries, it would be interesting to see how Cancrie evolves to cater to the global demand for Li-ion batteries projected to reach approximately 4.7 TWh by 2030.

[Edited By Shishir Parasher]

The post This Jaipur Based Startup Is Turning Coconut Shells Into Battery Superchargers appeared first on Inc42 Media.

It’s raining IPOs in some of India’s most exciting new-age sectors, from fintech to travel tech and foodtech to enterprise tech, and coworking startups are eager to get drenched too. 

The craze to list on the Indian bourses among Indian startups working in the coworking segment is such that at least two ventures, WeWork and IndiQube, have filed their respective draft red herring prospectus (DRHPs) with the Securities and Exchange Board of India (SEBI) in the last two months.

While WeWork India’s IPO comprises only an offer for sale (OFS) of 4.37 Cr shares, IndiQube plans to raise INR 750 Cr through a fresh issue of shares and INR 100 Cr via OFS.

Notably, coworking and flexible workspaces saw a demand surge after the Covid-19 pandemic, as companies started inclining towards remote and hybrid work models and preferred to become asset-light. Amid this, the successful public listing of Awfis in 2024 acted as a major catalyst for its competitors, who were already mulling the IPO route.

Riding this wave of positive market sentiment for flexible workplaces and an expected demand surge in the coming years, at least four companies in this sector — Smartworks, DevX, WeWork, and IndiQube — are likely to get listed this year. BHIVE and Table Space are also mulling their public listings in the near to medium term.

Among these names, WeWork India, which is the leading flexible workspace provider in the country in terms of its revenue, has first-hand witnessed the consequences of failed coworking business models. 

Now, before we delve deeper into understanding how WeWork India and IndiQube stack up against each other in the run-up to their respective IPOs, let’s steal a glance at WeWork’s history.

WeWork India: The Poster Boy Of Coworking

Founded by Adam Neumann and Miguel McKelvey, WeWork began its operations in 2010. Backed by the likes of SoftBank Group and Goldman Sachs, “WeWork” became synonymous with the term “coworking” globally.

When WeWork India was set up in 2017, India’s coworking sector was nascent. Despite this, names like Awfis, 91Springboard, BHIVE Workspace, and IndiQube were operational in the country, and Bengaluru led the show. 

The India business was set up as a joint venture between the Indian office development company Embassy Group and the US-based coworking company WeWork.

In 2019, WeWork Inc’s parent entity filed for a $1 Bn public offering with the US market regulator Securities and Exchange Commission (SEC). Soon after, financial and management troubles broiled up in the company, leading to a withdrawal of its IPO papers.

Two years later, WeWork went public through a special purpose acquisition (SPAC) merger with BowX Acquisition Corp. However, due to the Covid-19 pandemic, WeWork’s occupancy rate dropped significantly. Amid surging losses and other governance issues, it filed for bankruptcy at a US court in November 2023.

Once valued at $47 Bn, WeWork collapsed amid legal and corporate governance issues, leading to concerns about its impact on WeWork India. 

However, WeWork India claimed that its business was unaffected by the US entity’s bankruptcy, as WeWork Inc. held only around 27% stake in the India business and the remaining belonged to the Embassy Group. WeWork Inc. sold its entire stake in the India business last year.

Currently, 1 Ariel Way Tenant Limited holds a 22.72% stake (3.14 Cr shares) in WeWork India, while Embassy Group owns the remaining 73.82% stake (10.21 Cr shares).

As part of the OFS, Embassy is offloading 3.34 Cr shares in the company while 1 Ariel Way is also partially selling its stake (1.03 Cr). 

While WeWork India’s top line growth has been promising in the past few years despite the ongoing legal tussles at WeWork Inc., the former’s path to getting listed on the Indian bourses might not be straightforward. 

As per its IPO papers, as of September 2024, WeWork India does not have its own registered intellectual property rights. As the exclusive licensee of the WeWork Brand in the country, the coworking space provider still uses WeWork Global’s brand and intellectual property rights.

WeWork India is also dependent on this global brand, which operates with about 600 wholly owned and licensed locations in 35 countries, to attract global enterprises to its India offices.

Meanwhile, the coworking space provider said in its DRHP that if WeWork Inc. files for a Chapter 7 bankruptcy petition for its liquidation, there is a risk that WeWork India might not be able to use the “WeWork” trade name anymore as the WeWork Inc. group ultimately owns the trademark. This would materially and adversely affect its business, results of operations and cash flows.

Besides, any default by WeWork Inc., WeWork International Limited or any other entity using the “WeWork” trade name on its debt repayments can negatively impact the WeWork Brand in general and hence, WeWork India.

In addition, WeWork India still relies on WeWork International Limited for certain technological solutions relating to our operations, such as desk booking or visitor management systems, and it adheres to global standards prescribed by WeWork International Limited on certain processes and systems, which might require it to make extensive changes to its operational procedures and product standards.

Hence, as WeWork India gets ready for its debut on D-Street, there are many such concerns in the market around this IPO.

Besides profitability, valuation will play a key role in deciding whether WeWork’s IPO can become a successful IPO story. 

What’s In Offer From IndiQube?

Founded in 2015 by Rishi Das and Meghna Agarwal, IndiQube works as a managed office space provider that offers an ‘office in a box’ experience to clients. This includes workspace design, interior fit-outs and various B2B and B2C services powered by technology.

It also follows an asset-light business model, focussing on leasing rather than owning properties. The startup says the model allows it to secure 10-year leases with a three-year lock-in period, extendable for another 10 years, ensuring flexibility and control in its arrangements with lessors.

Backed by WestBridge Capital and ace investor Ashish Gupta, it has raised over $45 Mn in private funding to grow over the years.

As of June 30, 2024, the company claimed to manage a portfolio of 103 centres across 13 cities, covering 7.76 Mn sq ft of built-up area under management (AUM), with a total seating capacity of 1.72 Lakh.

As part of the OFS component in its INR 850 Cr IPO, promoters Das and Agarwal are offloading INR 50 Cr worth of shares each. Its other promoter Anshuman Das is not offloading any of its stake.

WeWork India & IndiQube: A Head-To-Head Comparision

First, it is important to note that WeWork India and IndiQube have separate business models. IndiQube works as a managed workplace solution provider. Its solutions range from providing large corporate offices (hubs) to small branch offices (spokes) for enterprises. 

Its core strategy hinges on acquiring buildings in high-demand micro-markets with robust infrastructure connectivity, low vacancy rates, and strong talent catchments. 

“This targeted approach ensures the long-term relevance of our offerings while enabling us to scale rapidly,” IndiQube mentioned in its DRHP.

The company partners with landlords to lease new properties and transform non-institutional and ageing Grade B properties into greener and modern workspaces by integrating interiors, amenities, technology, and sustainability initiatives.

Workspace leasing forms the core of its revenue. IndiQube also provides various other value-added services, including interior design and build, facility management, food, transport, and technology solutions. 

In its DRHP, the company said that its backward integration initiatives such as asset renovation and upgradation and forward integration to offer B2B and B2C services to clients and their employees, as well as core offering of plug-and-play workspace solutions enables the company to serve the entire workspace value chain comprehensively.

On the other hand, WeWork India brands itself as a “premium” flexible workspace operator with a variety of offerings, including enterprise office suites, customised managed offices, private offices, coworking spaces, hybrid digital solutions, and more. 

The company provides these workspaces with flexible lease terms that range from pay-per-use options to long-term contracts.

Of its 59 operational centres, 51 WeWork buildings currently are leased from landlords to run as WeWork Centres, where the company is responsible for fit-outs, and it collects membership revenue directly. 

Only three of its centres (59) run as “operator model”. Under this model, the company operates properties on behalf of landlords and retains a portion of the revenues as fees. As many as five of these centres provide facility management and fit-out rental services, generally for a fixed fee.

Unlike IndiQube, WeWork India is also heavily focussed on enterprise clients, who contributed 76.21% to its net membership fee in FY24. This strategy has perhaps helped WeWork India to build a more stable customer base with bulk orders for long periods of time.

WeWork India’s client base comprises names like JP Morgan, Amazon, Dyson, Deutsche Telekom, Grant Thornton, and several startups.

Though IndiQube, too, has enterprise clients, these are usually mid-to-large enterprises, with IT companies comprising almost 50% of the client base. Some of its top clients include Zerodha, Myntra, NoBroker, Perfios, upGrad, and Siemens.

Both WeWork and IndiQube earn a majority of their revenues from workspace leasing while ancillary services contribute around 10-11% to each of their top lines. 

For instance, of IndiQube’s INR 867.66 Cr operating revenue, INR 741.6 Cr came from workspace leasing in FY24 and INR 92.2 Cr (implying 11%) from value-added services. 

WeWork India generated INR 1,402.5 Cr as membership revenue and INR 178.1 Cr as service and ancillary revenue.

WeWork’s ancillary revenue comes from hordes of services, including WeWork Labs-Accelerator Program for Startups, WeWork Events & Hospitality, WeWork Workplace- Office SAAS, and more.

Now, the story is not this simple, especially if we consider their other competitors.

Before WeWork and IndiQube, Awfis has already gone public giving almost 2X returns to its investors since its listing. While this has set a strong path for others to go public, the competition has grown.

Now, in terms of both the number of seats provided and the cities present, WeWork stands way below Awfis, IndiQube, and its other IPO-bound peer Smartworks. 

Awfis currently has more than 1.1 Lakh seats spread across 17 cities while WeWork India has 93,786 seats in eight cities. IndiQube has more than 1.18 Lakh seats, the highest.

Awfis is also quite asset-light. It runs a majority of its centres in a “managed aggregation model” where landlords share rewards and risks alike.

“Now, each of these models has its advantages and disadvantages,” said Utkarsh Kawatra, cofounder and CEO at myHQ by ANAROCK.

He added that as Awfis runs largely on a revenue-sharing model with landlords, its spaces are not necessarily all prime assets and are smaller. This makes them affordable for smaller companies and startups. Also because their centres are smaller, it allows Awfis to have a greater footprint (compared to WeWork) and have more centres in more cities. 

WeWork’s centres are larger (around 50K-1 Lakh sq ft) and largely fall under Grade A assets, which makes its pricing more premium and changes its client base. 

“A startup with a small member of five people, which is looking to save money, will not pay such a high premium to take up a Grade A asset in WeWork, they would go to the likes of Awfis or other players,” said Kawatra.

Meanwhile, IndiQube had the highest occupancy rate of 90.06% as of March 31, 2024. WeWork’s occupancy stood at 85.55% as of this period and Awfis’ at 84%.

Besides, valuations would play a critical role in these IPOs. While WeWork India’s IPO valuation is not confirmed yet, some media reports suggest that it may be looking at a valuation of $2 Bn-$2.5 Bn. In comparison, its listed rival Awfis’s current valuation is around $540 Mn.

Prashanth Tapse, senior VP (research) at Mehta Equities believes that the new coworking spaces going IPO will seek a valuation at least 6X higher than Awfis, which is justified. However, a premium above 8X of Awfis’ valuation would be considered expensive by the market.

Moving on, fundamentals will also play an important role here. If IndiQube seeks a valuation of more than $1 Bn, it will be considered expensive because its sales are the lowest among its IPO-bound competitors and Awfis.

At a time when profitability is key, both WeWork and IndiQube continue to be loss-making entities while Awfis has already turned profitable.

What Lies Ahead?

In its recent report, Knight Frank Research said that coworking spaces constituted a substantial 68% of all flexible space transactions during 2024 compared to 58% in 2023 in India.

Besides Bengaluru, which leads the flexible workspace market in India, cities including Chennai and Hyderabad are also catching up in the race. As per the report, 15% of Chennai’s office space transaction volumes in the second half of 2024 comprised flexible workspace operators. 

“Key players such as Symbyont, WeWork, Awfis, Table Space were the most active operators in the flex space segment… The flex space segment has become a significant part of the commercial real estate market as the flexibility, cost savings, and adaptability of these workspaces continue to attract a diverse range of businesses,” the report noted.

Similarly, in Hyderabad, the share of transactions by flex space operators surged to 19% in the second half of last year from 8% in H2 2023. Meanwhile, transaction volume grew 116% year-on-year. 

Key players like Smartworks, IndiQube, Table Space, and Awfis played a pivotal role in this expansion, the report observed.

As per CBRE data, India is one of the largest flexible workspaces markets in the APAC region with a total stock of over 72 Mn sq. ft. in Tier 1 cities as of the first half of 2024.

Hence, per the current market trends, the demand for flexible workspaces is increasing in tier-I cities. This has created a steady growth path for the top companies providing solutions here.

“The market is very promising right now. Pre-Covid 19 era, everybody expected the coworking space to cover around 9-10% of the commercial real estate leasing market. Now, it’s capturing more than 20% of the market,” said Kawatra, adding that companies also like the flexibility that coworking spaces offer.

Kawatra sees this trend continuing for at least the next two to four years. Also, while there is a growing traction of flexible workspaces in tier-II cities, the trend is in its nascency largely dominated by tier-1 cities, which capture more than 80% of it. 

However, at a time when the Indian market remains volatile and fundamentals remain key, the valuations of these companies will be keenly watched along with their paths to profitability.

Tapse of Mehta Equities believes that WeWork and IndiQube may be taking a risk by planning to get listed. This is because the overall market sentiment currently is a “bit dovish and there is a macroeconomic downturn”.  

“However, if I were to extrapolate Awfis’ market performance, it’s trading 80% higher than its IPO price, which would encourage new investors to take the risk and invest in the upcoming coworking IPOs.”

Come as it may, it would be interesting to see if WeWork India can rewrite its success story on the Indian bourses with IndiQube and Smartworks standing as major competitors. 

[Edited By Shishir Parasher]

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India’s motorcycle market is undergoing a gradual transformation with the rise of electric vehicles (EVs). While scooters have driven the EV fervour among Indians in the last three to four years, producing motorcycles has not been a priority for Indian EV manufacturers.

It is this white space that Oben Electric has emerged to solve with its flagship vehicle Rorr, which runs for nearly 190 km on a single charge and produces 8 kW or nearly 11 horses.

With Rorr, Oben Electric’s ambition is to give a tough time to legacy 100 cc to 125 cc motorbikes and their users the option to switch to a more affordable electric option.

Founded in 2020 by Madhumita Agrawal, Dinkar Agarwal, and Sagar Thakkar, Oben Electric’s Rorr, launched in 2023, locks horns with motorcycles like Hero Splendor, CD Deluxe or Bajaj Pulsar 125 and the ilk, and it seems that it has already started creating some stir in the market.

Rorr, whose full-fledged production and deliveries began just last year, has seen its vehicle registrations grow by almost 5X in the last seven months. Oben Electric, which offers three variants of its Rorr, makes for an interesting case study, especially at this point, more because India’s escooter market leader Ola Electric, too, has entered the fray with its Roadster series to catch the attention of Indian bikers. 

“There was an era of electric scooters, and now, I think this is the era of electric motorcycles. This is why so many big players are entering this market… And Oben already has a lead in the market, especially in the daily commuter segment, which will see the next big adoption,” cofounder and CEO Agrawal told Inc42.

Cranking Oben Electric In Motion

Little did the founders Madhumita Agrawal and Dinkar Agarwal know back in 2016 that they would ever pivot from running an R&D services and IP consulting company to floating an EV manufacturing unit, directly locking horns with legacy players like Honda, Hero, TVS, Bajaj, et al.

Interestingly, this has been quite an unconventional pivot for the founder duo, who were joined by their third cofounder, Thakkar, only after the inception of Oben.   

IIT Kharagpur graduates Madhumita Agrawal and Dinkar Agarwal cofounded their first company, IPexcel, in 2016. After running the company for five years, the Agrawal duo found their passion elsewhere.   

Backed by Dinkar’s experience of working with companies like General Electric early on in his career, the duo decided to suit up for an adventurous ride in the Indian EV space, and, therefore, founded Oben Electric in 2020. 

What came in handy was Thakkar’s tricks of the trade, who already hailed from the sector. Despite this, the founders found it hard to kickstart their EV OEM journey as the market was already flooded with deep-pocketed players. 

This led to the realisation that they would solve what no other player was solving. In a market inundated with EV scooters, the founders decided to focus on bikes.

“We realised that we were sitting in a huge motorcycle market yet the electrification was being led by scooters. There is a reason why escooters picked up in adoption initially. They were easily available in China, B2B picked up, and it was easy to convert a scooter customer compared to a motorcycle because motorcycles are complex products. So, we decided to solve this problem,” CEO Agrawal told Inc42.

After almost three years of working on R&D, Oben Electric got the approval for the product launch in 2023 and began the production of Rorr at a small scale. Its full-scale production began last year.

As per the CEO, Oben Electric sold 1,000 units last year. By March 2025, the startup expects to sell another 1,000 electric motorcycles. It currently has a manufacturing facility with an annual capacity of 100K units.

The startup has raised INR 150 Cr so far and is backed by the likes of Stride Ventures, Indian Renewable Energy Development Agency (IREDA), Ambis Holding US, Kuberans Ventures, Karimjee Group, and Mission Vertical Capital.

What’s worth noting is that Oben Electric claims to be among the only few EV players building all the high-cost and critical EV components in-house from scratch. 

Oben Electric’s Roaring Bet

Speaking with Inc42, the founders highlighted that while Hero Splendor and Bajaj Pulsar users are shifting to electric motorcycles primarily for cost savings, they also place a strong emphasis on design and aspirational value.

“Along with the cost reduction aspect due to zero reliance on petrol, the electric motorcycle market is also driven by design and performance,” Madhumita said, adding that since the livelihood factor also adds to it, there is no place for compromising on product quality.

Though initially, Oben Electric tried building its EVs using batteries and motors from third-party vendors, the products did not match the expectations that the team had for building Rorr.

This prompted the startup to develop its own motors, vehicle control units, and battery technology in-house while retaining proprietary vehicle design.

“One of the biggest differentiating factors of our battery technology is that we use lithium ferrous phosphate (LFP) batteries while everyone else uses lithium nickel manganese (NMC) batteries. If you see all the electric cars, the likes of BYD are using LFP batteries, and we are the first to introduce LFP in two-wheelers. Having extensive R&D experience in the EV industry, we knew that this is the battery technology suitable for tropical climates like in India or Africa,” the founder said, adding that the company also makes its fast chargers in-house.

Even though the startup’s target customers are not the customers who prefer long rides, like those in the case of Royal Enfield riders, the company has tried to give its users relief from range anxiety.

According to the company, its fast charger is capable of charging the EV up to 80% in under 2 hours. The price of its vehicles ranges between INR 90,000 and INR 1.5 Lakh. 

Oben’s Road Ahead 

After establishing its foothold with its 22 stores in the country, including in major cities such as Delhi, Jaipur, Pune, Bengaluru and Kerala, Oben Electric aims to increase the store count to more than 100 by the end of this year.

Besides penetrating deeper into the existing cities, the startup plans to expand its presence to Telangana, Tamil Nadu, Madhya Pradesh, and Gujarat by the end of the year. It is also eyeing selling 10,000 vehicles by the end of 2025.

Even though Ola Electric has entered the electric motorcycle market with its Roadster, Oben Electric is confident that the market opportunity is huge.

Besides, service is a crucial part of being able to consistently sell in the electric motorcycle market, which comes with strong in-house capabilities and not by using off-the-shelf components, the founders said. 

“First, each of our stores has a service centre. Then, we have experts from the industry who come from Yamaha and Revolt – who have seen the best and worst of both worlds. Besides, there are training processes and customer satisfaction score (CSAT) metrics that we follow to ensure top-notch customer service,” the CEO said.

With a strong in-house tech stack and after building a larger India story this year, Oben Electric has plans to expand internationally. In the near term, it is looking at the African and the UAE markets. The startup also plans to raise a $50 Mn institutional funding round later this year.

Oben Electric’s journey so far has been impressive, especially when compared to a few other startups such as Matter Motor, Odysse, and a few others, who have either failed to scale or have delayed launches. 

While the future looks promising, the entry of deep-pocketed players like Ola Electric in this segment may raise challenges for Oben Electric. Also, legacy players, too, are not far away from embracing electrification. Amid this, the key question is — Does Oben Electric have enough moat to grease its wheels?

[Edited By Shishir Parasher]

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As anticipated by experts, the manufacturing industry received a significant boost from the central government during the Union Budget 2025-26 on Saturday (February 1). 

Whether it’s the proposal to introduce a National Manufacturing Mission, benefitting cleantech manufacturing and MSMEs or an exemption of basic customs duty (BCD) in some critical materials used in lithium-ion (Li-ion) batteries, the Nirmala Sitharaman-led 8th consecutive budget gave some much-needed boost to most sectors in manufacturing. 

“Our Government will set up a National Manufacturing Mission covering small, medium and large industries for furthering ‘Make in India’ by providing policy support, execution roadmaps, governance and monitoring framework for central ministries and states,” said the finance minister during the budget.

She also emphasised that given the government’s commitment to “climate-friendly” development, the proposed mission will support cleantech manufacturing to improve domestic value addition and build the ecosystem for solar PV cells, EV batteries, motors and controllers, electrolysers, wind turbines, high voltage transmission equipment and, grid-scale batteries.

The mission has five key focus areas—enabling the ease and cost of doing business, a future-ready workforce for in-demand jobs, a vibrant and dynamic MSME sector, availability of technology, and quality products.

Key Announcements To Boost Manufacturing 

In fact, supporting MSMEs has also been a major focus area of the government during this year’s budget. The finance minister said that the investment and turnover limits for the classification of all MSMEs, including those in manufacturing, will be enhanced by 2.5X and 2X, respectively.

“Currently, over 1 Cr registered MSMEs, employing 7.5 Cr people, and generating 36% of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45% of our exports,” said Sitharaman while making the announcement, adding that the step would these MSMEs achieve higher efficiencies of scale, technological upgradation, and better access to capital.

However, it is pertinent to note that the National Manufacturing Mission and the steps to be undertaken as part of it lacked any proper budgetary allocation and roadmaps for implementation. 

Despite that, industry leaders are largely positive given the preliminary promises under the mission are expected to not only benefit the operation, skill development, and local value addition in the domestic market but also bolster India’s export capabilities.

Uday Narang, founder and chairman of Omega Seiki, told Inc42 that by providing targeted policy support, a robust governance, and a monitoring framework, the Mission will streamline operations and create a conducive environment for industries to thrive. 

“The focus on small, medium, and large industries ensures that every tier of the manufacturing sector is uplifted, enabling them to scale, innovate, and compete globally. This will likely lead to an increase in domestic production, a reduction in dependency on imports, and a significant boost to job creation,” said Narang. 

“Moreover, the emphasis on the ease and cost of doing business will make India a more attractive destination for both local and foreign investments, thus driving further growth in the sector.”

However, it is also important to note that several key recommendations from the semiconductor and the broader electronics system design and manufacturing (ESDM) sector as well as the EV and cleantech industry were not met during the budget.

Cleantech Manufacturing: What The Budget Got Right & Wrong

In line with industry expectations, the sustainability theme was prevalent almost throughout the budget this year.

In continuation of the Centre’s push to Li-ion battery manufacturing for EVs, mobile phones, and other consumer electronics, the Centre announced complete exemption of customs duty on 35 capital goods and machinery for use in the manufacture of these batteries for EVs and 28 capital goods and machinery for use in the manufacture of batteries for mobile phones.

BCD has also been removed from critical materials such as cobalt, lithium-ion battery scrap, and lead.

We must note that during the previous budget in July last year, the Indian government had announced customs duty exemption on 25 critical minerals, including cobalt, lithium, copper, germanium, and silicon. 

As she noted then, these critical minerals and rare earth elements are truly critical for sectors including nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics — all of which have separately received some important policy boost from the Centre in budget this year.

Taking some bold steps towards further enabling nuclear energy, the finance minister proposed the establishment of a Nuclear Energy Mission with an outlay of INR 20,000 Cr. While the aspect of sustainability and clean energy is highly debatable here, the step could be significant in helping India become less reliant on fossil fuels.

On the other hand, though the energy industry’s demand for an enhancement of fund allocation for green hydrogen is long-pending, the matter wasn’t addressed during this year’s budget.

Sandiip Bhammer, founder and managing partner at Green Frontier Capital said that the announcement of a dedicated Manufacturing Mission with an emphasis on cleantech manufacturing is a definitive step in the right direction for India’s industrial transformation. 

“This initiative will accelerate the adoption of sustainable production methods, foster technological innovation and attract investments in green manufacturing solutions. As global demand shifts toward eco-friendly products and processes, this mission can position India as a key player in the global supply chain,” he said.

However, Bhammer also noted that while the budget has outlined India’s intent to promote cleantech manufacturing, the lack of a detailed roadmap or specific budgetary allocation is missing. 

“For transformative impact, clarity around incentives, infrastructure development and funding mechanisms is crucial and necessary. Focused policy frameworks and measurable goals could provide greater confidence to investors and industry players together,” he added.

ESDM Sector: What It Received & Missed

The ESDM sector and semiconductor industry had hoards of recommendations to the government, most of which were not fulfilled. This included an introduction of India Semiconductor Mission 2.0, enhancement of the PLI budget for manufacturing, and a few others.

However, despite that, the industry is not completely disappointed.

The sector is looking to benefit from the announcement of INR 10,000 Cr funds of funds and the proposal for a deeptech fund, which will ultimately help startups, and deeptech will not be missed out given the startups here are emerging stronger than ever.

Besides, the government’s MSME focus will also help the small and medium businesses in the ESDM sector.

Ashok Chandak, president of the India Electronics & Semiconductor Association (IESA) told Inc42 that the Union Budget 2025-26 presents several indirect benefits for the ESDM sector, which also aligns with key recommendations from the IESA, but they got muted amid the big announcements.

IESA’s focus was on startups, R&D, skilling, export support, and continued semiconductor manufacturing incentives, which has been partially addressed through schemes including the budget’s provisions for MSME support, startup’s Centers of Excellence (CoEs) in skilling and AI, reduced BCD on display panels and lithium-ion batteries, export promotion schemes, tax certainty for electronics manufacturing, establishing national manufacturing mission, and presumptive taxation on electronics manufacturing support, among others.

“The INR 20,000 Cr allocated for R&D, along with 10,000 technology fellowships at IITs, will foster innovations and IPR development,” Chandak said.

However, he also noted that the budget lacks clarity on ISM 2.0 (incentives beyond the $10 Bn mark) and does not introduce a major PLI scheme for components or a dedicated product creation initiative as a growth driver. “This could potentially slow the pace of value addition in India’s electronics ecosystem. We remain optimistic that these aspects will be addressed through specific policy measures beyond the budget announcement,” he added.

Export, The “4th Engine” Of Growth

As noted by Chandak, the proposals for the manufacturing industry during the Budget 2025 are expected to push India’s export market further. 

Omega Seiki’s Narag said that the National Manufacturing Mission will strengthen India’s export potential by enhancing production quality, reducing manufacturing costs, and improving global competitiveness. 

“By focusing on ease of doing business and technological advancement, India will be able to deliver high-quality products at competitive prices… the focus on a skilled workforce ensures that industries can meet global demand for advanced, sustainable products,” he said.

Speaking on a similar note, Leo Peter Charles, founder and MD of Jane Solutions, also said that with this NMM, India will have the leverage of becoming an aggressively export-oriented country if all the cards are played well.

Meanwhile, it is pertinent to note that today, Sitharaman also proposed establishing an Export Promotion Mission calling exports the “fourth engine”.

As per Economic Survey 2024-25, total exports, including merchandise and services, have seen a steady 6% growth in the first nine months of FY25 reaching $602.6 Bn. Growth in services and goods exports, excluding petroleum and gems and jewellery, was 10.4%. However, there was a slight moderation in export growth in some areas when compared to the growth witnessed in the same period of FY24.

[Edited by Nikhil Subramaniam]

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A revamped Central Know Your Customer (KYC) registry will be rolled out in 2025 in order to simplify the KYC process, said finance minister Nirmala Sitharaman during her Union Budget 2025 speech on Saturday (February 1).

The Central KYC Registry is a centralised database of all KYC records of customers in the financial sector. The objective of this repository is to reduce the burden of producing KYC documents and getting those verified each time the customer creates a new relationship with a financial entity.

“To implement the earlier announcement on simplifying the KYC processes, the revamped Central KYC Registry will be rolled out in 2025,” said Sitharaman.

The Centre also plans to implement a streamlined system for periodic updating.

Ravi Kumar Jha, MD and CEO at LIC Mutual Fund, said in a statement that these measures will ease the entry of new investors under financial inclusion.

The finance minister said that this year’s Budget aims to initiate transformative reforms across six domains for the next five years — financial sector,  power sector, mining, urban development, taxation, and regulatory reforms.

Besides revamping the CKYC registry, the Centre also increased the foreign direct investment (FDI) limit for the insurance sector to 100% from 74% earlier.

“This enhanced limit will be available for those companies which invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified,” Sitharaman said.

For startups, the FM also announced a corpus of INR 10,000 Cr for a new fund of funds (FoF) for startups.

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Finance minister Nirmala Sitharaman on Saturday (February 1) said that the Centre will establish an Export Promotion Mission with sectoral and ministerial targets. The mission will be driven jointly by the commerce, MSME and finance ministries.

Emphasising that exports are the fourth engine of growth, Sitharaman said that the Export Promotion Mission aims to facilitate easy access to export credit, provide cross-border factory support, and help MSMEs tackle non-tariff measures in overseas markets.

As per Economic Survey 2024-25, total exports, including merchandise and services, have seen a steady 6% growth in the first nine months of FY25 reaching $602.6 Bn. Growth in services and goods exports, excluding petroleum and gems and jewellery, was 10.4%. However, there was a slight moderation in export growth in some areas when compared to the growth witnessed in the same period of FY24.

To further boost global trade, Sitharaman also announced a digital public infrastructure, ‘BharatTradeNet’ (BTN), for international trade. The will be set up as a unified platform for trade documentation and financing solutions and complement the Unified Logistics Interface Platform.

“The BTN will be aligned with international practices,” the finance minister said.

Besides, the Centre plans to develop domestic manufacturing capacities for the economy’s integration with global supply chains.

“Sectors will be identified based on objective criteria, facilitation groups with participation of senior officers and industry representatives will be formed for select products and supply chains. Through this, there are huge opportunities related to industry 4.0, which needs high skills and talent,” Sitharaman said.

The industry leaders also expect that her other announcements during the budget today, including INR 10,000 Cr Fund of Funds for Startups, the proposal for a deeptech fund, PM Research Fellowship scheme to provide 10K fellowships for technological research in IITs and IISc, are also set to positively impact the country’s export industry.

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The Centre will establish a national institute of food technology, entrepreneurship and management in Bihar, finance minister Nirmala Sitharaman announced during her Union Budget 2025 speech on Saturday (February 1).

“The Institute will provide a strong fillip to food processing activities in the entire eastern region. This will result in, one, enhanced income for the farmers through value addition to their produce, and two, skilling entrepreneurship and employment opportunities for the youth,” she said.

Notably, the announcement aligns with the Centre’s broader Budget 2025 themes—boosting agricultural growth and productivity, strengthening rural prosperity and resilience, and supporting MSMEs.

In a push to boost agriculture, the finance minister also announced establishing a Makhana Board in Bihar to improve the production, processing, value addition, and marketing of makhana.

The board will provide handholding and training support to makhana farmers and will also work to ensure they receive the benefits of all relevant government schemes, Sitharaman said.

The FM added that a national mission on high yielding seeds will be launched, aimed at strengthening the research ecosystem and targeted development and propagation of seeds with high yield, pest resistance, and climate resilience.

The overall agro-processing industry as well as skill development in rural areas in this sector are expected to benefit significantly once these schemes are implemented. Besides, this would have a direct impact on strengthening the supply chain in the FMCG market.

As per Economic Survey 2024-25, the agriculture and allied activities sector has contributed approximately 16% of the country’s GDP in FY24.

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India’s vast manufacturing industry, which contributes around 17% of the nation’s GDP, is expecting the central government to make some important announcements to boost the renewable energy sector, micro, small and medium enterprises (MSMEs), semiconductor and electronics manufacturing industry, and towards the allocation of various production-linked incentive (PLI) schemes in the Union Budget 2025-26.

The Indian government has increased its bets in the country’s vast manufacturing industry in the recent past, which also aligns with the recent geopolitical shift towards the ‘China+1’ strategy. 

During the Union Budget 2024-25 in July last year, finance minister Nirmala Sitharaman made hoards of announcements for the manufacturing industry, which included a credit guarantee scheme for MSMEs in the manufacturing sector, reduction in basic customs duty for certain raw materials used for manufacturing mobile phones, lithium-based batteries and others, increase in production linked incentive (PLI) scheme for automobile and auto components, and more.

Now, with Union Budget 2025-26 around the corner, key industry demands are around expanding the PLI scheme for manufacturing in deeptech — this includes green energy, advanced materials, and semiconductors. 

But the manufacturing sector is also vital for the textile, automotive, and pharma industry — all of which have an impact on Indian startups. 

Over the past few years, PLIs have proven to be a major catalyst in spurring manufacturing in electronics. Now experts want the same formula applied to emerging technology sectors to expedite growth in these areas. 

Will Budget 2025 Fit The Deeptech Themes?

India has long been the breeding ground for research and development of technology in sectors like semiconductor chips and biotech, largely due to the presence of talent. However, due to lack of infrastructure and capital towards building hardware, the country could not step up in the manufacturing to bolster these ecosystems.

Today, with the deeptech theme growing stronger than ever, India is making significant strides towards strengthening the manufacturing in these sectors too. 

Sachin Sharma, partner at Grant Thornton Bharat, said that to sustain growth in the manufacturing and supply chain sectors, the Budget 2025 must focus on expanding the PLI scheme to encompass high-demand sub-sectors like green energy and advanced materials.

The government approved the INR 19,744 Cr PLI budget for green hydrogen in 2023. However, even during the previous budget, the industry wanted the government to expand the scope of this PLI scheme, which did not happen. 

For instance, cofounder and CEO of Newtrace, Prasanta Sarkar, had told Inc42 earlier that the current budgetary allocation for the production of green hydrogen molecule and manufacturing of electrolysers at scale favours importing existing technologies while policymaking should actually lean towards internal capacity building and developments as well owning the IP rights within the country to secure energy infrastructure.

CareEdge Ratings said that there should be enhancement of fund allocation for green hydrogen over and above the current outlay under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme.

“India is steadfastly moving towards its target of 500 GW non-fossil fuel capacity by 2030 through a concerted effort to accelerate capacity additions and deepen its manufacturing value chain while remaining cognizant of its energy security needs as a developing nation as well as the variability induced by the growing share of renewable energy in its energy mix,” CareEdge said in its Budget expectation report.

The ratings agency also called for enhanced capital allocation towards Green Energy Corridor projects, reinstatement of a 15% concessional corporate tax for manufacturing companies except for establishing renewable energy manufacturing zones, enhancement of budgetary support to offshore wind capacity development, among others.

“With fiscal consolidation in focus, direct spending might be measured, but areas like capital goods, auto components, defense, and renewables are likely to benefit,” Sonam Srivastava, founder and fund manager at Wright Research told Inc42. 

“Infrastructure-driven demand, semiconductor manufacturing incentives, and policies promoting green energy are anticipated,” she added.

In fact, several industry bodies have submitted their recommendations to increase the budgetary allocation under the $10 Bn PLI scheme for semiconductor manufacturing and design. From India Semiconductor Mission 2.0 to stricter norms for the PLI scheme for electronics manufacturing, the entire ESDM sector is looking at several important announcements in the upcoming Budget.

Meanwhile, the Centre is also likely to increase its focus on building technology for defence.

Srivastava said that defense and aerospace manufacturing could see higher allocations along with custom duty rationalisation and credit support for MSMEs to push domestic manufacturing companies in EVs, renewable energy, components and other supply chains.

Meanwhile, the industry is also expecting the Indian government to introduce its new scheme focussed on R&D in deeptech sectors such as AI, robotics, and advanced weapon systems.

Ankur Bansal, managing director at BlackSoil said in a statement that targeted investments in climate tech, agritech, and deeptech, particularly emerging sectors like spacetech, will support India’s sustainable economic transition. Hence, the government should implement measures to attract more foreign capital to spur growth in these critical sectors.

Will EV Makers See Any Benefits?

The auto industry’s long-pending demand to rationalise GST on auto parts and components has once again been presented to the government this year.

The EV ecosystem also continues to urge the Centre to reduce the current GST rate of 18% on EV charging services and lithium-ion batteries to 5%.

Mehta Equities said in its report that the EV industry has high expectations from the upcoming Budget. 

“The sector is hoping for some level of rate rationalisation to reduce interpretative issues and litigations. The EV ecosystem urgently needs scalable infrastructure, including widespread deployment of EV charging stations, battery-swapping hubs and integration with renewable energy sources,” the research firm said.

The EV logistics players have also urged the government to incentivise electrification of the commercial fleet and reduce financing costs for EV logistics operators. Besides this, the EV industry is also looking forward to more robust and well-defined policies on the recycling of lithium-ion batteries.

Meanwhile, Mohal Lalbhai, cofounder and group CEO at Matter Motor believes that there is a need to revisit the PLI scheme for smaller companies and startups in the EV sector. Recently, Federation of Indian Chambers of Commerce and Industry (FICCI) also put forward this recommendation to the Indian government. 

Whether Sitharaman’s budget addresses these concerns will be keenly watched, given the significance of the EV industry in the long run. 

Upskilling Remains A Challenge

“Manufacturing will remain a priority, though the emphasis might shift towards execution and demand generation rather than broad-based new incentives. With private capex still lagging despite strong corporate profitability, the government may focus on policy stability and investment facilitation to crowd in private investments,” added Wright Research’s Srivastava.

As for the spending on incentivising manufacturing, Mohit Khanna, fund manager at Purnartha One Fund, told Inc42 that after a significant fall in the government’s capex in FY25, a solid mid-teen YoY growth in the capex announcement can be expected. This expectation is also supported by strong revenue collection by  the government in FY25.

“The government should continue to strengthen its ELI (Employee Linked Incentive) scheme. Focus on upskilling a large labor force will benefit the manufacturing sector in the long-run. Sub sectors like diagnostics and medical-equipment manufacturing could benefit from indirect-tax rationalisation and export-oriented subsidies,” Khanna said.

But he also believes that instead of sectors, India is placing its bet on emerging themes. In this regard, rural recovery could be a strong outperformer. 

“Inflation is trending down and should help RBI in reducing interest rates. Lower interest rates along with increased budgetary allocations could kick-start recovery in rural incomes and the economy. Manufacturing industries like irrigation pipes, rural-housing, two-wheeler, and FMCG could benefit from this trend,” he added.

Along with a huge focus remaining on sustainability and promoting green manufacturing, the experts are expecting a balanced approach that can integrate industrial growth with rural demand stimulus.

The MSME Focus Of The Union Budget

According to the Economic Survey 2024, the share of MSME-made products in exports in FY24 was 45.7%, which clearly indicates the importance of further bolstering manufacturing across MSME sector.

Grant Thornton Bharat’s Sharma said that empowering MSMEs, which employ over 110 Mn people, with greater access to credit and technological support is essential.

SBI Research also urged for PLIs to boost MSMEs in textile, garments, handicraft, food processing, leather, electronics, auto components, and drugs manufacturing. 

This could mean that the central government increases budgetary allocation to expand the Credit Guarantee Fund Trust for Micro and Small Enterprises and incentivise banks to cover more MSME loans under this scheme.

It is pertinent to note that the finance minister announced a credit guarantee scheme for the MSMEs in the manufacturing sector in the last Budget to streamline term loans for the purchase of machinery and equipment without collateral or third-party guarantees. 

However, the industry now wants an expansion of the credit guarantee schemes along with a separate tax regime tailored specifically for MSMEs.

“MSMEs are seeking further digitisation support to integrate technology and ecommerce, along with tax relief measures such as increased turnover limits for GST exemptions. Strengthened export incentives and skill development programs are also to help MSMEs penetrate international markets and address workforce challenges,” said Saahil Goel, MD and CEO of Shiprocket.

[Edited by Nikhil Subramaniam]

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