Agentic AI startups struggle for backers as tech sweeps globe

India's agentic artificial intelligence (AI) startups are running into a funding wall as investors move beyond funding the narrative, backing startups that show revenue traction or unique technology rather than just building applications on existing AI models.

- Rwit Ghosh [e-mail] BENGALURU

There are 172 agentic AI companies in India.

(REUTERS)

Agentic AI-software designed to carry out specific workflows or tasks autonomously is drawing investor interest worldwide. These "agents" can plan, make decisions and execute actions with limited human supervision.

Of the 172 agentic AI companies in India, only four have reached Series B and 10 have raised Series A, according to data from Tracxn. Forty-nine are at seed stage, 14 have undisclosed funding, and 95 haven't raised any capital.

"India sits squarely in a seed-heavy, Series A bottleneck phase," said Santosh Tiwari, partner, transaction strategy and execution at EY-Parthenon. "The era of 'fund the narrative' in agentic AI is giving way to 'fund the proof.'"

Most of the funding crunch comes from India's focus on startups that build on top of global AI models from OpenAI, Anthropic and Google. That makes sense locally, thanks to India's engineering talent and low costs. But investors abroad want something harder to copy-strong intellectual property or specialized solutions-which many Indian startups don't yet have.