Funding in India’s GenAI ecosystem saw uptick in Q2 of FY25: Nasscom

India’s GenAI start-up space witnessed a strong revival in funding activities in the second quarter of fiscal 2025, after suffering a huge dip in the previous (sequential) quarter, according to a Generative AI Tracker released by the tech industry’s apex body Nasscom on Monday.

According to the report, the space saw drastic ups and downs in the last over four quarters. Indian GenAI start-ups received only $14 million investments in the second quarter of fiscal 2024, however, the third quarter of FY24 saw a jump to $55 million, while the fiscal closed with $74 million. Yet, fiscal ‘25 opened with a huge dip, with the first quarter reporting only $8 million investments. However the second quarter ended September , witnessed a significant comeback at $51 million, Nasscom reported.

Funding activity gained significant momentum in Q2 of FY 2025, with a record 20 funding rounds, marking a strong recovery after a sluggish first quarter, it reported.

Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, said, “Q2 FY2025 marked a key shift in India’s GenAI space, with funding focused on impactful applications that enhance productivity. Future success will rely on strategic innovations, pilot project results, and lessons learned along the way.”

The increasing maturity of the Indian GenAI ecosystem reflects its transition from exploratory use cases to scalable, production-ready solutions. This growth is fuelled by improving funding inflows, rising revenue realisations, and expanding applications in enterprise productivity and customer engagement, as per the report.

“’The generative AI landscape is evolving rapidly, reshaping technology service providers and unlocking new capabilities. Providers are reevaluating strategies and increasing investments in technology and talent,” Ms. Gupta added.

The report also observed that India has strengthened its position in the global GenAI landscape, ranking sixth among major economies in terms of GenAI startup ecosystems. The country’s GenAI ecosystem has demonstrated strong and broad-based growth, with significant advancements in innovation, funding, and talent development, it further reported.