6 days ago
Accel warns Indian AI founders risk falling behind
Accel warns Indian AI founders risk falling behind
BENGALURU: Accel partners Shekhar Kirani and Prayank Swaroop said Indian AI startups risk falling behind their global counterparts due to a lack of urgency and global ambition, even as technical capabilities catch up.
Speaking at a recent media roundtable on Wednesday, the investors said that while the country is seeing a new wave of technically strong, AI-native founders, many are still operating with a conservative, risk-averse mindset that could cost them valuable time in a hyper-competitive cycle.
'In the Valley, it's a warzone. Engineers are building, iterating, raising money, and chasing scale aggressively,' Kirani said.
'In India, many still operate in peacetime mode, trying to optimise for capital efficiency, fixing bugs, and selling to five customers. That's not how you win this AI cycle.'
This difference in attitude is also reflected in valuations. According to Kirani, an AI-first startup in the US showing revenue acceleration can command a valuation of over $500 million at $15 million annual recurring revenue (ARR), while a traditional SaaS firm with similar numbers would likely be valued closer to $100 million.
by Taboola
by Taboola
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'The market rewards velocity. If you're an AI-native company growing fast, the delta in pull and valuation is unprecedented,' he said.
Swaroop added that investors, too, have recalibrated expectations. 'Everyone's looking for that breakout moment. Earlier, a company showing $1-2 million ARR might be considered early stage. Now, if it's AI-first and compounding fast, the expectation is that it hits $50-100 million in revenue within 12-18 months,' he said.
'The bar is higher, but so is the upside, if the founder is thinking globally.'
Accel has backed Indian AI startups such as Cursor and RapidClaims. While bullish on India-specific use cases such as cost-efficient inference, voice interfaces, and regulatory-compliant models, the partners emphasised that a strong go-to-market motion, especially in the US, is still essential.
'Platform adoption decisions still get made in the Valley,' said Kirani.
'If your product isn't getting used there, even Indian engineers hesitate to adopt it. That's why we ask our founders to be present in the Bay Area early.'
Calling the current moment a '24- to 36-month land grab,' both partners urged founders to prioritise speed and product-led growth. 'If you're not compounding fast, you'll be irrelevant by the time the dust settles,' Swaroop said. 'This isn't a time to save money, it's a time to fight.'
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