Desi AI founders risk falling behind overseas peers. The Accel partners highlighted that the Indian AI startups are falling behind global competitors due to a lack of commitment and limited global perspective, despite having similar technical abilities.
Accel stated that US-based AI startups are experiencing rapid revenue growth and higher valuations than Indian AI startups. Investors demand that AI-first businesses grow quickly, and they require a global outlook for success.
Accel (or Accel Partners) is a global venture capital organization that works with startups in their initial growth-stage investments.
Prayank Swaroop and Shekhar Kirani, the partners of the firm, emphasized concerns about Indian AI startups straggling behind global players, despite having equal abilities. They cited the lack of commitment and limited global perspective as key reasons for the issue.
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During a media roundtable on Wednesday, they observed that although India is seeing an increase in technically proficient, AI-focused entrepreneurs, many of them continue to take a cautious, risk-averse approach that might be harmful in this rapidly evolving industry. Shekhar Kirani stated:
“In the Valley, it’s a warzone. Engineers are building, iterating, raising money, and chasing scale aggressively. In IOndia, many still operate in peacetime mode, trying to optimize for capital efficiency, fixing bugs, and selling to five customers. That’s not how you win this AI Cycle.”
The difference in valuations is clear. Kirani noted that although traditional SaaS companies with comparable numbers are usually valued at about $100 million, US-based AI-first startups that show revenue growth can reach valuations of over $500 million at 15 million dollars ARR. He mentioned:
“The market rewards velocity. If your’re an AI-native company growing fast, the delta in pull and valuation is unprecedented.”
Swaroop pointed to a change in investor viewpoints and said:
“Everyone’s looking for that breakout moment. Earlier, a company showing 1-2 million dollar ARR might be considered early stage. Now, if it’s AI-first and compounding fast, the expectation is that it hits 50-100 million dollars in revenue within 12-18 months. The bar is higher, but so is the upside, if the founder is thinking globally.”