In India, two AI startups have become unicorns within a month, reigniting market interest in the country’s rapid advancement in artificial intelligence despite its reputation as a software outsourcing hub. The latest to secure funding is Emergent, headquartered in Bangalore, which specializes in low-barrier AI programming tools and has now reached a valuation of $1.5 billion.
Emergent completes a $300 million funding round
On Wednesday, the company disclosed that Emergent raised $300 million in its Series C round, valuing the company at $1.5 billion post-money. The round was led by Bangalore-based investment firm Creaegis, with participation from existing shareholders including Claypond, Sentinel Global, Khosla Ventures, SoftBank Vision Fund 2, Lightspeed, and Y Combinator.
Emergent, founded just one year ago, is positioned to help non-technical users build applications. The company states that approximately 70% of its users had no prior programming experience, and around 12 million applications have been created on the platform over the past year, primarily by small business owners and individual entrepreneurs.
India saw two AI unicorns in one month.
Just a month ago, another Indian AI company, Sarvam, also completed a new funding round, reaching a post-money valuation of $1.5 billion. The consecutive entry of both companies into the unicorn club is seen as the latest sign of growing momentum in India’s AI startup ecosystem.
Deepika Giri, Head of Research for AI, Analytics, and Data at IDC Asia Pacific, stated that nearly half of Indian enterprises are already testing agent-based AI solutions. She noted that the pace of such experimentation and automation is uncommon for a market of India’s scale.
IDC predicts that by 2026, 45% of Indian organizations will use professional cloud services to access computing resources, helping to alleviate bottlenecks in training and inference.
Opportunities at the application layer still outweigh breakthroughs at the underlying layer.
Multiple research institutions believe that India’s more realistic opportunities currently lie in the application layer rather than in foundational models or chips. IDC notes that India has one of the most extensive AI accelerator ecosystems in Asia-Pacific, with access to chips from Nvidia, AMD, and major cloud providers, offering local businesses greater flexibility.
Mohammad Hassan, an analyst at S&P Global Market Intelligence in Asia Pacific, said that Sarvam’s funding reflects market confidence in India’s homegrown, multilingual AI intellectual property; while Emergent’s funding demonstrates that India’s tech talent remains a key source of its long-term competitiveness.
However, India still lags significantly behind global AI leaders. The country has not yet developed cutting-edge AI chips domestically, nor does it possess foundational models comparable to those from leading U.S. or Chinese companies, and its data center capacity remains relatively underdeveloped.
The Indian government has consistently emphasized its aim to establish its position by developing applications on top of overseas foundational models. In February this year, Prime Minister Modi stated at the Global AI Summit that India’s goal is not only to be a user of AI technology but also to become one of the top three global creators of AI.
Additional context: Counterpoint Research believes that India’s AI ecosystem will still require at least three to four years to develop a stronger self-reinforcing effect. While India already has a foundational base of software talent and application development capabilities, its ability to consistently access foundational models and computing resources will continue to influence the pace of future expansion.