AI startups can transform India’s IT sector: Lightspeed

Even as several software-as-a-service startups head to the public markets this year, India hasn’t capitalized on the boom of the 2010s, according to a top executive at global venture capital firm Lightspeed Venture Partners.

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With AI, customers are looking for innovators.

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“Over the last 15 years, SaaS has come in under expectations as a category, in terms of how many $5 billion-plus companies we expected to emerge from India,” said Dev Khare, partner at Lightspeed Venture Partners, in an interview.

It's not that India hasn’t seen its share of SaaS success stories. Freshworks is listed on the Nasdaq, while Zoho continues to scale, moving from small and medium business contracts to larger enterprise deals.

However, only a handful of innovative companies came from that era, including health-tech company Innovaccer, contract management company Icertis, and data observability platform Acceldata, to name a few. These were founded by Indians who started them back home before relocating headquarters to the US.

Most AI startups have yet to prove that they can do what incumbent companies do better