Sanjeev Bikhchandani's InfoEdge has allocated nearly 50% of its startup investments to deeptech and artificial intelligence over the last 12 months.
InfoEdge's investments have traditionally focused on consumer tech, leading to large companies like Eternal (Zomato and Blinkit) and PB Fintech, which are now multi-billion-dollar companies.
The addition of the two sectors in which the firm is investing is driven primarily by two reasons.
“The key change here is that both AI and deeptech are absolutely transformational in their ability to create new business models,” said Chinmaya Sharma, partner at InfoEdge Ventures, in an interview with Mint. “More importantly, they've become topics of strategic interest for the country.”
Since 2020, the firm has invested in 30 deeptech companies, putting in a total of ₹455 crore, while on the AI front, it has invested in 28 companies and deployed a total of ₹614 crore. Among its deeptech portfolio, 26 have raised follow-on funding, while from the AI segment, 15 have done so, including voice AI enterprise platform Gnani.ai.
InfoEdge's AI portfolio has a gross internal rate of return (IRR) of roughly 31% and a gross multiple on invested capital (MOIC) of 2.1x. On the other hand, the deeptech portfolio, given it's still early in the investment cycle have a gross IRR of 15% and a gross MOIC of 1.2x.
Deeptech companies in InfoEdge's portfolio include skin health therapeutics startup Ahammune, electric air taxi company ePlane, Deepinder Goyal's air mobility startup LAT Aerospace and health tracking company Temple.
Traditionally, InfoEdge's investments into startups have been at the very early stages. As a result, public market volatility hasn't impacted valuations. “Given we fish in the early stage pond, it is somewhat unaffected by the high tides and low tides of in the public market. On a month-on-month, quarter-on-quarter basis, we haven't seen that gloom seep into the early stage," said Sharma.
- Info Edge now puts nearly half its startup money into deeptech, AI.
- Since 2020, firm invested ₹455 crore in 30 deeptech, ₹614 crore in AI.
- Early-stage bets shield Info Edge's portfolio from public market volatility, Chinmaya Sharma, partner at InfoEdge Ventures, said.
- Firm stays conservative, prefers smaller cheques and better valuations over bigger funds.
- InfoEdge also backs consumer AI startups like Pokus.ai, Rumik.ai and Shoppin.
Even as its portfolio of companies has grown, InfoEdge is in no rush to write significantly larger cheques or increase the size of new funds that it launches. Back in April, the firm committed ₹250 crore to A88 Fund I, a scheme launched by A88 Trust, to back early-stage deeptech startups in India.
Staying conservative by design
“We like to come in earlier, get better valuations. I get a higher percentage of a company for a slightly smaller cheque size. We'll continue to be conservative in our investing strategy,” said Sanjeev Bikhchandani, co-founder of InfoEdge. The firm usually invests in companies that are between technology readiness levels (TRL) of 1 to 3. Most venture capital firms investing in deeptech tend to invest at TRL levels of 4 and above.
While companies executing big fundraisers is encouraging for the broader ecosystem, Sharma said that valuation should be carefully assessed.
“The only word of caution is that—the valuations are staged against the company’s numbers and it is incumbent upon those companies to be able to justify that by building businesses that have numbers to boot against those valuations,” Sharma further noted adding that these large fundraisers are only step one of the ecosystem maturing but step two also needs to happen.
Over the course of a year, the firm looks at at least 1,000 startups, brings in about 100 of them, and invests about 3-4 per quarter. “For deeptech and AI startups, the first thing we look for is the quality of the founders, their commitment, willingness to go the distance and domain expertise,” said Bikhchandani. “Secondly, is it solving a problem, does it have customer love, is it sufficiently differentiated?”
Deeptech and AI investing at InfoEdge began in 2019, when the company's chief technology officer, Vibhore Sharma, wanted to explore other areas. In response, Bikhchandani brought him into the investing side of the business, handed over ₹35 crore, and asked him to explore what was happening in deeptech. As a result, InfoEdge invested in 13-14 deeptech companies. Today, AI and deep tech combined account for 20% of the firm's portfolio.
Deeptech investing in India has slowly been picking up over the last few years. While funding peaked back in 2024 to $1.6 billion, so far this year the sector has hit $1.23 billion, according to Tracxn, compared to $1.5 billion raised all of last year.
AI products for consumers
Given that InfoEdge's lifeblood has been investing in consumer technology companies, the firm has since begun to look at how AI is reshaping consumption, spending habits, and the way people interact online.
While large language models have seen mainstream adoption among most consumers, especially for using chat interfaces or generating images, other areas, like social gaming and next-generation marketplaces, are also emerging.
InfoEdge has invested in three consumer AI companies: Pokus.ai, a concierge service for consumers; Rumik.ai, which builds companion avatars and is a frontier AI lab; and Shoppin, a visual search and shopping discovery platform.
“With AI coming in, it's difficult not to imagine that pretty much all fundamental consumer experiences will be reimagined by creative founders,” said Sharma.