Bessemer Venture Partners is intensifying its pursuit of artificial intelligence (AI) startups in India, aiming to capitalize on the disruption of the country's expansive IT sector. With India's IT services market estimated at $283 billion, the potential for AI-driven transformation is substantial.
The venture capital firm is rigorously assessing between 20 to 30 AI companies on a weekly basis, demonstrating its commitment to identifying and investing in promising early-stage ventures. Bessemer is prepared to invest up to $15 million in initial funding rounds, signaling a strong intent to support the growth of nascent AI innovators. This strategy aligns with Bessemer's broader investment approach in India, where it seeks to provide capital ranging from $5 million to $40 million per startup, nurturing companies from their early stages through subsequent growth phases.
Bessemer's increased focus on AI startups reflects the growing recognition that AI-native companies are poised to redefine how digital services are delivered and monetized in India. These startups are developing AI-first platforms and tools that can automate tasks traditionally performed by human engineers and analysts, often at a fraction of the cost. This shift towards AI-based process automation has the potential to significantly impact India's IT services industry, which has long relied on human labor arbitrage.
The VC firm has identified three emerging categories of AI-first challengers set to disrupt traditional service models. These include pure software plays, AI-enabled services, and services for AI. Pure software plays fully automate tasks end-to-end, while AI-enabled services combine AI-driven automation with human oversight. The third category encompasses companies providing data, model operations infrastructure, and evaluation tools to build AI solutions.
Bessemer's interest in the Indian AI landscape is underscored by the launch of its $350 million India-focused fund in March 2025. This fund targets early-stage startups across key sectors, including AI, SaaS, fintech, digital health, consumer brands, and cybersecurity. The firm's investment strategy emphasizes a long-term approach, backing companies from their early days through subsequent growth phases.
The appointment of Pankaj Mitra as a partner in Bessemer's India team further highlights the firm's commitment to AI. Mitra's focus is on AI, enterprise technology, and cybersecurity investments, bringing experience from Cisco and Infosys to support the next wave of tech evolution across industries.
While global VC funding has surged with a significant portion directed towards AI deals, India's startup investment has remained relatively flat. Nevertheless, Bessemer's proactive approach indicates a strong belief in the potential of Indian AI startups to not only disrupt the IT sector but also drive broader economic growth.
Several Indian AI startups are already making waves with innovative solutions. Ascimov is developing autonomous AI assistants for sales and operations automation. Fenmo AI specializes in AI-powered finance agents for tasks like invoice matching and reconciliation. Maieutic Semiconductors is creating an AI copilot for chip designers. Trupeer is transforming content creation using generative AI.
As enterprises face pressure to adopt AI and demonstrate tangible results, they are increasingly willing to allocate a portion of their budgets to explore new AI-native startups. This trend is expected to fuel a fresh wave of outsourcing driven by AI, where agility and time-to-value become critical metrics.
