7 days ago
Kluisz.ai raises $9.6 million in largest AI seed round of 2025 so far
Hospitality chain OYO's former global chief operating officer (COO) Abhinav Sinha has launched a B2B-focused startup for private cloud infrastructure after raising $9.6 million in seed funding.
Sinha started the company two-and-a-half months ago with his co-founders Vamshidhar Reddy and Abhijeet Singh, who formerly worked at McKinsey & Co and AT&T, respectively.
Kluisz's seed round is the largest in the artificial intelligence space so far this year, according to Tracxn data. Overall, the company has raised the seventh largest equity seed round, out of 489 deals so far this year.
Notably, Kluisz is the only AI software company among the top 10 seed investments so far this year, with five others being deep-tech, while the rest are split between investment tech, religion tech, fintech and B2B-ecommerce. The number one and two spots are held respectively by electric commercial vehicle maker EKA, which raised $23 million from Enam Holdings, and RackBank, a provider of AI-focused data centre colocation services that raised $16.5 million from investment firm KRIIS.
New York-based early-stage venture capital firm RTP Global led the round, with participation from Unicorn India Ventures, Blume Founders Fund, Climber Capital and a few angel investors including OYO founder Ritesh Agarwal.
Apart from his previous role as COO at OYO, Sinha was chief product officer as well and credits his time in the dual roles as the reason for his new venture. 'We were honing down on drivers in the cloud ecosystem, trying to figure out efficiency, reducing latency and experimenting. We always wanted to set up a private cloud for ourselves but found it daunting," Sinha told Mint in an interview.
Kluisz will be spending about 80% of the seed funding on hiring its engineering talent while the rest will go towards expanding its go-to-market team. Currently, the firm's main focus is on India as a market, while also looking at the Middle East. 'The tailwinds, from a data sovereignty perspective, is very high. Even from the perspective of enterprises focusing on generative AI and agentic solutions," said Sinha.
The company aims to have its first customer by the end of the year or by January 2026, and eventually have a mix of small and medium businesses as well as enterprise customers contributing to revenue. Kluisz is targeting banking, financial services and insurance (BFSI), as well as manufacturing as early customers.
'The private cloud infrastructure market will continue to grow, fuelled by the increasing adoption of data-intensive workloads among enterprises," D.D. Mishra, vice-president analyst at technology consulting firm Gartner, told Mint in a written response.
The company's pitch is that while cloud infrastructure set-ups generally need a lot of people to operate efficiently given that data requirements are always scaling, AI can do a lot of the heavy lifting, especially when it comes to private cloud systems. As a result, a generative AI private cloud reduces costs and manpower.
'While traditionally favoured by sectors with strict compliance and security needs, private clouds are gaining some traction more broadly as organizations seek greater control, customization, and performance, especially for AI applications requiring specialized hardware and low-latency data access," Mishra said.
How large is the market really?
With AI becoming more prevalent across enterprise, data security is becoming a pressing requirement for large companies. As a result, they'll see private cloud offerings as a boon for AI-related workloads.
An IBM report from last year shows that 32% of Indian companies use only a private cloud, while 18% use a public one. However, 47% said that they use a hybrid cloud environment. In fact, hybrid continues to be the dominant IT infrastructure. A hybrid cloud is a form of cloud computing that allows organisations to manage their ecosystem using a combination of private, public and on-premises data centres.
Last year, cloud computing company Nutanix's survey found that 46% of the 1,500 respondents had already adopted hybrid cloud ecosystems. Technology consulting firm Gartner's own survey is even more bullish, suggesting that 90% of organizations will adopt a hybrid cloud approach by 2027.
That being said, end-user spending on public cloud services dwarfs private cloud significantly. Company spends on private cloud are expected to exceed $84 billion by 2029, according to Gartner's IT Services forecast. Public cloud end-user spending is expected to touch $723 billion this year alone.
