SAP report highlights AI investments by 77% of Indian startups, focus on profitability

Indian startups and the Indian startup ecosystem are growing at a rapid pace. The landscape is going through a transformative era. It is learnt that 77% of startups are now investing in Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT) and Blockchain. The shift was recently highlighted in a recent SAP India report in collaboration with Dun & Bradstreet. The report reveals the important role of cutting-edge technologies in the Indian startup ecosystem.

Indian startups are shifting their focus to Gross Margin (GM). Initially, they focused on Gross Merchandise Value (GMV). Now, they are emphasizing profitability and sustainable business models.

Sanket Deodhar, Vice President and Head of Digital Natives, SAP Indian Subcontinent, said the technology remains a cornerstone and plays a significant role as a differentiator for startups in achieving their business goals.

The Indian startup ecosystem is currently robust. It ranks third in the world with 300,000 startups. Of these, 113 are unicorns. The shift towards unit economics marks a significant evolution in the business landscape. The adoption of enterprise applications integrated with advanced technologies such as AI and ML is seen as essential.

Moreover, investments in AI and related technologies are not limited to metropolitan hubs alone. Tier II and Tier III cities emerged as innovation hotspots in 2023. These cities contributed 40% of the total tech startups. Chandigarh, Jaipur, Madurai, Indore, Kochi, Warangal, Hubli, Raipur, Vishakhapatnam, Guwahati and a few more cities now house 15% of the country’s tech talent pool.

Meanwhile, the rise of DeepTech has contributed to the success. About 25% of tech startups have embraced it by 2023. It is improving operational efficiency and also driving significant advancements across industries.