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Time of India
09-07-2025
- Business
- Time of India
Y Combinator's India cohort shrinks amid local capital reshaping deals, AI focus
Academy Empower your mind, elevate your skills The number of Indian startups selected by Silicon Valley's famed accelerator Y Combinator (YC) has plummeted to just four in 2024 from 66 in 2021, marking a sharp decline in participation from one of its most active international markets in recent years, according to information sourced from YC's comes at a time when Indian founders are increasingly opting to remain domiciled locally amid evolving regulatory dynamics and healthy prospects of listing on the domestic stock to industry executives and founders from YC's India portfolio, the decline is driven by multiple factors, including YC's requirement for accepted startups to set up a parent entity in the US, Canada, Singapore, or the Cayman Islands, even if they are originally incorporated is also a growing trend of startups shifting their holding entities to India in preparation for domestic IPOs. This reverse flipping entails paying hefty taxes in the US. Among startups that were part of YC, IPO-bound stock broking platform Groww paid around $160 million in taxes as it flipped its parent entity from the US to India last year, while Razorpay is estimated to have incurred a tax outgo of around $200 million and Meesho is expected to pay around $280-300 reason flagged by founders and investors is that YC is increasingly focusing on deeptech and AI-first startups, many of which require cutting-edge research and are often built around US-based technical talent. This evolving thesis has made it harder for early-stage Indian companies to gain admission, they said.'YC has pulled back a little from India because they were not getting the quality they wanted at the volumes they were seeing in India. There are still a lot of Indian companies which go and apply, but they don't have a separate India strategy now, which is why we are seeing a smaller number of companies selected,' an investor said on the condition of the leadership of OpenAI founder Sam Altman, during the 2014-19 period, YC began to double down on India intakes. This was the time when startups like Meesho, Zepto, Groww, Razorpay became a part of the YC sent to Y Combinator did not elicit a the four Indian startups selected by YC in 2024, three operate in fintech, while one is building B2B AI tools. YC has not selected any new Indian startups in the ongoing batch as of founders now have more domestic seed funding options than ever before. A growing base of early-stage Indian VCs, family offices, institutional investors, and angel investors is helping fill the funding gap once bridged by global accelerators like March, ET reported that India is also witnessing the rise of YC-type accelerators backing AI startups founded by local entrepreneurs. These include Paras Chopra's Lossfunk, a residency programme for AI builders; SaaS platform Upekkha, which pivoted to an AI fund; and Girish Mathrubootham-backed Together Fund, which also launched AI Studio to help founders navigate the AI landscape.'A lot of Indian founders who had gone abroad to raise capital have started flipping their structures back to India. Because they believe that Indian IPO markets are very good for them, because even at smaller sizes, they can actually list in India, which they find otherwise very hard in the US and other markets,' said Vikram Gupta, founder and managing partner of early-stage venture capital firm IvyCap said institutional investors saw a substantial cash return on their investments in Indian startups and VC funds, which led them to investing in other funds as well. This helped to boost the domestic capital regulatory changes such as the abolition of the contentious 'angel tax' have also enabled the growth of domestic spring 2025 batch featured 70 startups focused on agentic AI. The three-month accelerator programme invests $500,000 in each selected startup."With the context of India, YC is now focusing a lot on AI-based startups and when they map the AI story in India versus some of the other geographies like America, it is a matter of fact that American companies are definitely ahead of Indian companies as on date when it comes to adoption and curation of AI models,' said Jitin Bhasin, founder of healthcare fintech startup SaveIn, which was backed by YC in 2023, YC saw a change in its senior leadership with Garry Tan being appointed as its president and CEO, replacing Geoff inception, it has invested in over 5,000 companies that have a combined valuation of over $800 billion, as per YC Beri, partner at Jungle Ventures, said that while the focus on AI investments has resulted in a decline in India investments, founders today still have multiple seed fund options domestically with accelerator programmes such as Peak XV's Surge are also increasingly prioritising AI-first startups. In its last two cohorts, Surge backed a total of 27 startups, a bulk of which are in the AI or deeptech fields.
Hindustan Times
26-05-2025
- Business
- Hindustan Times
Bengaluru entrepreneur bans team from talking to Indian customers: 'Skip India movement'
Bengaluru-based millionaire and founder of Wingify, Paras Chopra, shared that he had banned his team at Lossfunk, an AI lab, from engaging with Indian customers. Chopra was replying to a post that claimed that more and more tech startup founders are choosing to bypass the Indian market under a "Skip India Movement". Vaibhav Domkundwar. a prominent investor and founder of Better Capital, claimed that AI founders are intentionally avoiding Indian customers for exploiting their startups for free trials or discounted work. "AI founders finally skipping selling to Indian customers after doing PoCs [Proof of Concepts] after PoCs and then being requested for even more 'free' PoCs. There is a limit to this and founders are saying screw it and skipping selling to Indian customers. Enough is enough. Even unicorns are using these startup founders (who are 10x better than their internal teams) for freebies," he wrote. Domkundwar claimed that his insights were based on 'primary data,' hinting at firsthand accounts from founders in his network. "I have banned builders at Lossfunk to talking to Indian customers. It's a tiny tech market, but a comfort zone. Many times, founders end up optimising for the Indian market and realise they can't scale further," Chopra said in a reply. The posts have sparked debate in the startup community, highlighting an uncomfortable pattern where Indian buyers engage in multiple unpaid product trials but rarely convert to paying clients. "Indians are 2x hard to convince and 1/4th willingness to pay. Not worth it at all. I have stopped marketing for the Indian market and will probably deprioritise Indians in the US too," said another founder. Another user said, "Same for new-tech hardware brands, tiny market, not many early adopters, low paying capacity." Others criticised the founder's move, calling it a mistake while trying to build a global startup.
Time of India
30-04-2025
- Business
- Time of India
To open source or not; Urban Company founders sell stock
Next To open source or not; Urban Company founders sell stock Want this newsletter delivered to your inbox? Also in the letter: Experts make a new case for open-source path to Indian LLMs Tell me more: In views: Entrepreneur Paras Chopra said Sarvam's pipeline should be open source, given taxpayers' money funds it. Hari Subramaniam, cofounder, Niti AI, argued that government-funded technology must be open to foster innovation. Sarvam cofounder Pratyush Kumar clarified that the government's involvement is an equity investment, not a grant. On the other hand: Urban Company founders sell shares worth Rs 780 crore Driving the news: Sources say part of the post-tax proceeds was used to complete the payment for partly paid-up shares issued during a 2019 rights offering. The founders will not participate in the IPO's offer-for-sale (OFS) tranche. Tell me more: Buyers include Prosus Ventures, Dharana Capital, Think Investment, former ITC executive Sanjiv Rangrass, and SailThru Ventures. Swiggy founder and Group CEO Sriharsha Majety purchased Rs 88 lakh worth of Urban Company shares. Post these secondary transactions, the three cofounders (Bhal, Chandra, and Khaitan) now jointly hold around 20% stake in the company. IPO details: Urban Company filed for a Rs 1,900-crore IPO on Monday, comprising a Rs 429-crore fresh issue and a Rs 1,471-crore OFS by investors such as Accel, Tiger Global, and Elevation Capital. In 2024, Dharana Capital bought nearly Rs 400 crore worth of shares from Urban Company employees and early backers, including Snapdeal founders Kunal Bahl and Rohit Bansal, who clocked a 200x return on their nine-year-old investment. Indian gaming companies enter big league with rising monetisation, global acquisitions Tell me more: Nazara Technologies is raising significant capital to acquire global studios, while players like Krafton and Bitkraft are actively pursuing Indian gaming IP. This marks a notable shift—from a sector long dominated by real-money gaming, now hampered by regulatory crackdowns—to positioning India as a creative and scalable game development hub. Global moves: Nazara has earmarked Rs 800–1,000 crore for acquisitions this year. Bitkraft is doubling down on its India bets. Krafton acquired a 75% stake in Nautilus Mobile for Rs 118 crore. Blue Ocean Games, backed by Krafton, launched a $30 million fund focused on Indian indie developers. AI: Boon or bane? Midcore in focus: Other Top Stories By Our Reporters Delhi HC bars Gensol and BluSmart from creating rights over leased EVs amid financial irregularities: Another 195 trainees fail assessment test at Infosys; co offers outplacement and upskilling support: Limit usage of non-financial requests to UPI: NPCI to banks: Inside Reliance Retail's reboot to 30-minute quick commerce: Global Picks We Are Reading Happy Wednesday! With Sarvam's new government assignment, India is debating open sourcing. This and more in today's ETtech Morning Dispatch.■ Indian gaming cos in big league■ Latest in Gensol crisis■ Infosys trainees let goIndiaAI's decision on whether to open source its foundation models has sparked debate after Sarvam AI was chosen as the first company to develop the country's large language model (LLM).Experts argue that government-funded models should be open to benefit the broader technology the open source debate is intensifying. Following the January release of the Chinese open-source model DeepSeek, OpenAI founder Sam Altman admitted their earlier approach had been 'on the wrong side of history.' India has now entered the Bhojwani, former head of People+ai initiative, countered that Indian businesses need a competitive edge to succeed globally, and their labour and intellectual property should not be undervalued.L-R, Varun Khaitan, Raghav Chandra, Abhiraj Singh Bhal, cofounders, Urban CompanyUrban Company cofounders Abhiraj Singh Bhal, Raghav Chandra, and Varun Khaitan have sold shares worth nearly Rs 780 crore through a series of secondary transactions in the months leading up to the at-home services platform's draft red herring prospectus (DRHP) filing India's gaming industry is seeing a steady rise in monetisation, especially beyond real-money gaming, as domestic firms and global investors seek to tap into the growing demand for Indian gaming intellectual property (IP) and talent, industry executives told AI is revolutionising game development, allowing smaller studios to produce high-quality games faster and more affordably. Yet, industry experts warn that an oversupply of content could outpace user demand, intensifying monetisation challenges in an already crowded games—such as shooters, strategy, and multiplayer action titles—are gaining momentum, especially via in-app purchases. Meanwhile, casual and hyper-casual games face headwinds amid a global slump in advertising Delhi High Court on Tuesday restrained Gensol Engineering , BluSmart Fleet, and BluSmart Mobility from creating third-party rights over 95 Tata Xpres Electric Vehicles leased by Clime has asked another 195 freshers to leave after they failed internal assessment tests, bringing the total number of affected trainees since February to over National Payments Corporation of India (NPCI) has directed banks to restrict the number of non-financial transaction requests they send to the Unified Payments Interface (UPI) Retail plans to scale up hyperlocal deliveries using its existing store network, adding dark stores where needed. The company outlined the strategy during its post-earnings call.■ Trump's tariffs will widen the digital divide ( Wired ■ AI executives promise cancer cures. Here's the reality ( The Atlantic ■ OpenAI forecasts revenue topping $125 billion in 2029 as agents, new products gain ( The Information
