77 percent of Indian Startups Now Invest in AI
More than 77 percent of Indian startups now invest in advanced technologies such as artificial intelligence (AI), machine learning (ML), internet of things (IoT), and blockchain. This trend highlights the rapid technological adoption and innovation within the Indian startup ecosystem, which is now ranked third globally, following the US and China, as noted by the report from SAP India, in collaboration with Dun & Bradstreet.
The report also underscores the rise of tier 2 and 3 cities as new innovation hubs, where 40 percent of tech startups originate. These cities leverage local talent and cost advantages, contributing significantly to the country's tech landscape. Cities like Chandigarh, Jaipur, Madurai, Indore, Kochi, Warangal, Hubli, Raipur, Visakhapatnam, and Guwahati host 15 percent of India's tech skill pool, marking a significant shift from traditional metropolitan tech centers.
This tech-driven evolution solidifies India's global stature as a leading startup powerhouse, supported by robust corporate governance and a conducive regulatory environment. "As companies shift their focus from GMV (gross merchandise value) to GM (gross margin) and seek to forge more sustainable business models with the help of transparent, trusted financial data, technology remains a cornerstone and a key differentiator for startups to achieve these business goals", said Sanket Deodhar, VP and Head of Digital Natives, SAP Indian Subcontinent.
Around 79 percent of startups believe that adopting enterprise applications integrated with new-age technologies such as AI is essential for scaling and improving unit economics. Nearly 72 percent of startups surveyed said that they already have or are looking to invest in new-age technologies. Furthermore, about 85 percent of startups believe that focusing on unit economics is a clear path to profitability and enhancing valuation.
“India's startup ecosystem is thriving, fueled by a favorable regulatory environment, a growing middle class, and a tech-savvy youth population. With almost 300,000 startups and 113 unicorns across diverse sectors, India ranks third globally in its startup ecosystem,” said Avinash Gupta, Managing Director and CEO India, Dun & Bradstreet.