April 8, 2024: Seed stage funding for AI-based startups specializing in artificial intelligence (AI) services is on the rise, reflecting a growing demand for technological solutions in various sectors of everyday life. Leading this phenomenon is Attentive AI which has bagged $7 Million funding.
Yagnesh Sanghrajka, founder and chief financial officer of 100X.VC, highlights this trend, noting an increasing inclination towards companies offering AI services.
Data from Tracxn reveals a significant surge in funding for AI-based startups across sectors like healthcare, logistics, energy, and fashion. In just two investment rounds, these startups have raised $6.7 million in seed and pre-seed funding, marking a notable increase from the $8.6 million raised in 2023.
In 2024 alone, AI based startups have secured $13.7 million in funding across three rounds, showcasing a remarkable growth trajectory. The quarter ending in March saw a staggering 1,362% sequential increase, with $11.7 million raised in two rounds.
Leading the funding charge in 2024 are AI startups like Attentive AI, which secured $7 million in its Series A round, demonstrating investor confidence in AI-driven solutions. Other notable deals include RagaAI and vodex.ai, raising $4.7 million and $2 million, respectively, in their seed rounds.
The surge in AI-based startups funding is led by new HNIs, Family offices and Micro VCs
The surge in funding isn’t limited to traditional venture capital firms; new players like high net-worth individuals (HNIs), family offices, and micro VCs are also investing in AI startups. Additionally, established corporations are reallocating investments or considering collaborations with these innovative startups.
Panasonic Life Solutions India, in partnership with 100X.VC, recently selected 12 startups for its Panasonic Ignition Corporate Accelerator program, offering substantial funding and collaboration opportunities. This initiative reflects the growing interest in nurturing AI-driven innovations.
Leading investors in Indian startups, including pi Ventures, Pentathlon Ventures, and Peak XV Partners, are actively contributing to the growth of AI startups. With the technology evolving rapidly, experts predict even larger investments in AI-based startups in the coming quarters, outpacing non-AI-related ventures.
As the landscape of AI-based startups continues to evolve, the influx of funding and support from diverse investors signals a promising future for innovation and technological advancements in various sectors.
