Early-stage venture investment firm Good Capital is dedicating $25 million to invest in AI start-ups in India by FY25. The VC firm will invest from Good Capital Fund II’s corpus of $50 million, which is expected to be used by 2027.
These investments will primarily target sectors such as cleantech, e-commerce, edtech, healthtech, SaaS and deeptech. The announcement comes at a time when India’s AI market is projected to reach a whopping $17 billion by 2027.
The firm plans to invest in 15-20 AI start-ups across early-stage and Series-A funding stages utilising AI and LLM models to create novel businesses through an investment strategy that backs start-ups empowering intermediaries, rather than the global trend of ‘disruption.’ Currently, 80 per cent of Good Capital’s pipeline consists of companies leveraging AI across various industries. “At Good Capital, we are committed to leveraging the inherent potential of India’s unique structure as a small-business economy. We focus on investing in start-ups that leverage the expertise of local intermediaries to offer services and products with low acquisition costs and high conversion rates,” said Arjun Malhotra, General Partner at Good Capital.
Opportunities
The recent advancements in AI present opportunities to bridge skill gaps, said the company’s statement. This enables intermediaries to focus on high-touch execution, while AI automates complex planning tasks.
Good Capital’s portfolio companies like, Cloudchef, Definitive, Propacity and MyGenie exemplify this approach by leveraging AI to streamline processes and enhance decision-making, thereby empowering intermediaries to focus on delivering value-added services to their clients.
Good Capital portfolio comprising over 25 start-ups, including unicorns such as Meesho and LEAD, as well as other ventures like Entri and Solar Square. Its strategic investments and widespread network of partners have positioned it as a key player in India’s burgeoning tech ecosystem.
Additionally, Good Capital looks to extends well beyond mere financial backing as it also aims to bring mentorship, access to networks and resources essential for navigating the complexities of the start-up journey.