 "Krishna Mehra")
AI-focused Indian founders are increasingly tapping into global capital as well as markets, building products with international relevance rather than restricting themselves to domestic demand.
Krishna Mehra, AI partner at venture capital firm Elevation Capital, said: "After the first couple of rounds, founders generally want to start tapping into more global capital. However, that is a template we are seeing more often, as ambitious founders want to build globally relevant products. Given the amount of white space in AI, there is an opportunity to build companies and products that are winners on a global stage."
Citing portfolio company Composio, Mehra said: "The company started in India, got an early validation, but very quickly started to get global validation and tapped into global capital for their future scaling." He added that founders are not restricted to building in a small niche or a small corner.
Comparing the trend with a few years earlier, Mehra, who lives in Silicon Valley, said that he meets several Indian-origin founders nowadays whose companies are in the early stages but are spending the majority of their time trying to build global products. "In the 2010s, the playbook for founders was to start building from India and then, over time, they would pivot to moving towards the United States, and founders might move here," he noted. "I think that is happening much earlier in the company's lifecycle. I see founders who have raised a small pre-seed round and are spending a lot of time in the Valley."
Mehra also unpacked the three elements to build and scale an AI company: customers, funding, and talent. He said while there is a well-developing local market in India, US customers are more eager to try new products and are willing to pay for them. "On funding, for early stages, there is good access to funding in India, but if you want to build a globally relevant category-defining company, you want to be able to access global pools of capital over time," he said. As for talent, he added, India has high-quality talent for the AI engineer profile, but not for roles like AI researchers.
Speaking on Elevation Capital's investment strategy in AI, Mehra said that the firm has not invested in the foundational layer but has been active in horizontal and vertical applications. "We have stayed out of the foundation layer because the amount of capital needed to succeed is humongous. There isn't a lot of action in India, and it's a very different game, but we have been active in every other layer of the stack."
A few AI companies that the firm has invested in include UnifyApps, Composio, SuperOps, Maxim AI, Adopt AI, Murf AI, Nanonets, Zeni, and Zoca. Over the last 18-24 months, the firm has invested in around 20 AI companies, which is much faster than the usual pace, Mehra added. For the firm, the average investment in AI companies is between $2 million and $5 million.
