Bengaluru: Indian artificial intelligence (AI) start-ups, Bengaluru-based Mihup Communications Pvt. Ltd and Chennai-based Mad Street Den Systems Pvt. Ltd, are among three early-stage local ventures that are on the list of some of the most low-key, yet promising start-ups around the world, according to a Bloomberg report.
Mihup, Mad Street Den and Omapal Technologies Pvt. Ltd, which operates online fashion rental venture Flyrobe, have been listed in a report titled These Are the 50 Most Promising Startups You’ve Never Heard Of. The report was prepared by market researcher Quid.
Other promising global start-ups on that list include California, US-based commercial drones start-up Airware, cloud security firm Distil, Palo Alto-based AI start-up Kahuna and Silicon Valley-based Quanergy Systems, which is working on self-driving car technology and has raised $134.5 million so far from investors such as Samsung Ventures and Daimler.
The emergence of Mihup and Mad Street Den highlights how AI start-ups from India are slowly starting to go mainstream and are among the hottest focus sectors for top venture capital firms such as Accel Partners and Sequoia Capital. Last year, Mihup raised about Rs45 crore from investors such as Accel, while Mad Street Den also raised an undisclosed sum in a Series A round from investors led by Seqouia Capital.
According to data from start-up tracker Tracxn, the number of Indian start-ups that are dabbling with AI and building intelligent systems, products and machines around the rapidly-emerging technology is on the rise.
Over the course of the past decade, India has produced at least 292 start-ups that have built products around AI, according to Tracxn. Of these, about 68 early-stage ventures have attracted cumulative funding of about $124 million across 89 rounds of funding.
“It’s a pleasant surprise to see a fair number of Indian entrepreneurs attempting to build AI startups now—that was not the case till a few years ago. India has traditionally been known as a destination for software services, not products. People always used to ask the question as to when we would start building hi-tech products and companies. So, it’s a welcome change to see that shift happening now,” said Abhishek Goyal, founder of Tracxn.
Other local start-ups that have recently attracted the attention of the mainstream VC community include healthcare AI start-up SigTuple, which received backing from Accel as well as Flipkart founders Sachin and Binny Bansal, among others; hiring start-up Belong, which has built an AI-enabled candidate sourcing platform; and IDG Ventures-backed Uniphore, which is working on speech recognition, voice biometrics and virtual assistant solutions and has raised about $6.6 million so far. A number of marquee investors, including Binny Bansal and T.V. Mohandas Pai, even invested in AI-focused venture fund Pi Ventures earlier this week.
In a December interview, Shekhar Kirani, a partner at Accel Partners India, said that AI would be one of the top focus areas for the VC firm’s fifth India fund—Accel raised $450 million as part of its fifth India fund in December.
Mihup Communications is one of the companies in which Accel has invested.
According to experts tracking the Indian start-up ecosystem, areas such as natural language processing, machine learning and cognitive computing have caught the eye of investors across the board, given heavy investments that companies across sectors are making in the sector, increasing the potential for big-bang exits over the next 5-10 years in the same way as the consumer internet sector did for investors over the past decade.
Companies ranging from the world’s largest technology services firm International Business Machines Corp. (IBM) to new-age tech giants Google Inc., Apple Inc. and Facebook Inc. to automotive giant Ford Motor Co. have already poured billions of dollars towards leveraging cognitive computing and AI.
According to a recent forecast by technology researcher International Data Corp., global revenues from cognitive systems and AI is estimated to cross $47 billion by 2020.