Why Artificial Intelligence is The Way Forward for India’s Startup Ecosystem
Artificial intelligence (AI) has become the dominant theme in the technology world today, engaging the attention of every enterprise as it is set to become a disrupter for all industries. It is not only the technology companies which are developing new platforms based on AI but also the start-up community which is throwing up innovative solutions.
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In India, the trend is no different with many of the large technology services companies coming out with their own AI platforms even as a growing number of start-ups are focused on this technology.
Applications in Many Sectors
Artificial Intelligence is finding applications in many sectors such as Healthcare, LegalTech, Cyber Security, FinTech etc.
Healthcare is one of the first and more popular areas of both AI and AR/VR applications. AI in healthcare dominates all other industrial applications of AI. Startups are using Machine Learning to reduce drug discovery time, improve diagnosis, and provide virtual assistance to patients. No wonder then AI in healthcare attracted $1.8B in funding since 2012 globally.
Similarly, IoT is transforming traditional sectors such as logistics and manufacturing. IoT is also solving problems in Healthcare by improving patient monitoring and in Home Automation by allowing people to communicate with smart appliances.
Manish Singhal, founding partner, Pi Ventures, an early-stage fund which is focused on AI, machine learning and Internet of Things, said, “We are seeing about eight good AI startups every month and the quality of these firms are only improving.”
The revival of interest in machine learning has been driven by a confluence of factors, such as the massive increase in computing power, emergence of neural networks (connected transistors that replicate the structure of neurons in the human brain) and the easy availability of vast amounts of data, thanks to the Internet.
The key element which is driving these start-ups is the presence of digital data which can be harnessed through AI to build use cases which can be implemented in the real world.
According to Nasscom, data science and AI technologies allows harnessing complex, high volume, high speed data into insights for decision making, emerging as the one of biggest growth opportunities for India to capitalise on.
V Balakrishnan, former board member of Infosys and founder of Exfinity Venture Partners, which focuses on investments in business-to-business companies, said, “The momentum in new AI start-ups in India is good and the trend is only strengthening.”
The growth of AI start-ups in India is also a sign of maturity in the Indian technology industry ecosystem. This expansive ecosystem has given rise to a talent pool which has a deep understanding on the various nuances of AI technology.
(Source: Financial Express)
According to Balakrishnan, “Earlier people were talking about AI, but were not able to build good use cases but now they can showcase concrete implementation examples. This has also caught the investors’ attention.”
The Way Forward
Globally over 550 startups, with AI as core, have raised more than $5B in 2016 alone. The number of deals increased from 160 in 2012 to 658 in 2016. Between 2012 and 2016 the total investments in AI based startups stood at approximately $12.5B. India ranked 4th with just 3.5% of that total investment behind US (61.7%), UK (6.5%) and Israel (4.3%). For 2017, global financing for AI start-ups is projected to surpass $10.8 billion — nearly double the $5.6 billion spent in 2016.
As the ecosystem matures, we need to move from a ‘knowledge economy to innovation economy’. For instance, according to a recent PwC report, AI alone is expected to contribute an additional $15.7 trillion to the global GDP by 2030. Take Blockchain startups and cryptocurrencies for example, the total value of cryptocurrencies reached a whopping $179 Billion. According to Coindesk, global VCs poured almost $1.9B into blockchain startups with countries such as Israel, Russia, and the US leading the way.
We are undoubtedly seeing the next generation entrepreneurs solving quintessentially Indian problems but with cutting edge technology. Few of our own companies such as Vernacular.ai, Active.ai, and Embibe are doing so. So are Niki.ai, Sigtuple, and Mad Street Den.
Having said all, the continued success of Indian ecosystem depends on many efforts coming together. Similarly, it needs a constant pipeline of great founders with great ideas.