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VC firm Good Capital to invest $25 million in AI startups this financial year – SME News

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Early-stage venture investment firm Good Capital on Friday said it is looking to invest $25 million in AI startups in the current financial year 2024-25. The company said it will focus primarily on cleantech, e-commerce, edtech, healthtech, SaaS, and deeptech segments. 

Good Capital plans to invest in 15-20 AI startups across early-stage and Series-A funding stages leveraging AI and LLM models to develop new businesses through an investment strategy that backs startups empowering intermediaries, rather than the global trend of “disruption”.  

Currently, 80 per cent of Good Capital’s pipeline involves startups using AI across multiple industries.  

“Recent advancements in AI present opportunities to bridge skill gaps. This enables intermediaries to focus on high-touch execution, while AI automates complex planning tasks. Essentially, AI acts as a catalyst, enhancing the capabilities of intermediaries by managing tasks beyond their core competencies,” the company said. 

Good Capital’s portfolio includes over 25 startups such as Meesho, LEAD, Entri and Solar Square. 

Speaking on the investment plan, Arjun Malhotra, General Partner at Good Capital, said, “We focus on investing in startups that leverage the expertise of local intermediaries to offer services & products with low acquisition costs and high conversion rates.” 

The firm currently manages a $100 million capital pool across three funds.

The Indian AI market is projected to grow at a CAGR of 25-35 per cent to hit $17-22 billion by 2027, according to a report by Nasscom and BCG earlier this year. Over $4 billion in AI investments were received in India in 2022-23 with most funding coming to technology, healthcare, data, analytics and digital content segments. 

Moreover, India has the third largest AI talent base with 1.25-1.35 million demand expected by 2027.

Importantly, the Cabinet in March this year had approved a national-level IndiaAI mission with a budget outlay of Rs 10,371.92 crore to establish a “comprehensive ecosystem catalyzing AI innovation through strategic programs and partnerships across the public and private sectors,” according to a statement by the Cabinet.  

This included improving computing access and data quality, developing indigenous AI capabilities, attracting top AI talent, enabling industry collaboration, providing startup risk capital, ensuring socially impactful AI projects and bolstering ethical AI.

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