Investment in AI start-ups is rising substantially, with Agentic AI emerging as the current preference among venture capitalists.
In the vibrant landscape of Indian tech start-ups, artificial intelligence (AI) is making a significant impact. In 2024, AI start-ups raised a staggering $780.5 million, marking a nearly 40% increase year over year [1]. This upward trend continues into 2025, with venture capitalists (VCs) showing particular interest in a new type of AI known as agentic AI.
Agentic AI is a form of AI that can plan, decide, and execute tasks autonomously across various business functions. Examples include customer service bots that solve tickets end-to-end or healthcare agents scheduling patient follow-ups and coordinating trials [3]. VCs are drawn to this technology due to its enterprise adoption potential and return on investment (ROI)-friendly applications across sectors like healthcare, IT operations, and customer support [2].
The allure of agentic AI lies in its ability to transform AI from a passive assistant into an active partner that can handle repetitive, complex, and strategic tasks autonomously. Combining agentic AI with generative AI capabilities creates powerful, conversational, and context-aware agents that not only plan and act but also generate content, enabling new levels of automation and user interaction [5].
Several key factors contribute to the surge in VC funding for agentic AI. Advances in foundational AI, especially Large Language Models (LLMs), have enabled these systems to reason, plan, and adapt in sophisticated ways [2]. This makes agentic AI more capable and versatile in real-world applications.
Moreover, agentic AI is driving both cost savings and revenue uplift across various industries. Enterprise interest in agentic AI is growing, with companies moving past experimentation and embedding agents in real workflows [4]. The trend of investing in AI that makes decisions on its own is seen as a catalyst for this growth.
In Q1 2025, six of the top 10 VC deals were AI-focused, and 71% of the funding went into AI-related start-ups [6]. Notable Indian start-ups that received funding in this period include AMT, Asepha AI, Mercanis, Parloa, Composio, Adopt AI, StackAI, AutonomyAI, Cognition AI, Coworker, Endex, VoiceCare AI, Othor AI, Thinking Machines Lab, Fractal Analytics, and Graas.ai [7].
As the Indian AI market is projected to grow from $10.15 billion in 2025 to $45.72 billion by 2034, with a compound annual growth rate (CAGR) of 18.20%, VCs are looking to invest in areas like climate tech, AI, consumer tech, fintech, and edtech in 2025 [8].
However, investors are keen on start-ups that address safety, complexity, and scalability from day one in the context of agentic AI. In regulated sectors like banking, pharma, or logistics, start-ups with strong human-in-the-loop systems, audit trails, and safeguards are particularly attractive [9].
The Indian AI ecosystem is rapidly evolving, with over 6,200 AI start-ups and Bengaluru leading the charge. OpenAI, a global player in the AI space, raised a record-shattering $40 billion in March 2025, valuing the company at $300 billion [10]. As agentic AI continues to mature and prove its worth, we can expect to see even more investment and innovation in this exciting field.
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