In a rapidly evolving technological landscape, the intersection of generative artificial intelligence (Gen AI) and climate tech emerges as a pivotal force shaping the future of innovation. According to Prashanth Prakash, founding partner of Accel and chairperson of Karnataka Startup Vision Group, Gen AI, climate tech, and fintech are to be very important development themes in 2024.
Prakash asserts that Gen AI, with $25 billion invested globally, is on the verge of disrupting not only the marketing stack but also revolutionising healthcare, particularly in drug discovery. The potential of Gen AI is yet to fully manifest in India, the world’s third-largest startup ecosystem. As the technology continues to advance, its transformative influence is expected to reshape how companies operate across various industries.
While Gen AI promises a revolution, Prakash emphasises that the climate tech sector is now more crucial than ever. Investors are increasingly drawn to startups focusing on developing sustainable products, emphasising the significance of manufacturing in this space. This shift aligns with a broader global trend where startups, around 1,000 in number, are actively contributing to sectors such as construction, food processing, textiles, chemicals, and toys. Notable areas of interest include the global packaging market, electric vehicles (EV), and batteries.
Prakash reveals that manufacturing-focused startups have garnered a substantial $8 billion in investments over the past seven years. With approximately 1,000 startups engaged in various manufacturing sectors, the potential for growth in areas like construction, food processing, and electric vehicles is evident. This surge in investments underscores the increasing importance of sustainable and environmentally friendly practices within manufacturing processes.
Alongside Gen AI and climate tech, Prakash highlights that fintech remains an evergreen opportunity in India. The country’s vast scale, coupled with the proliferation of smartphones and a user base exceeding 600 million internet users, positions fintech as a lucrative domain for innovation. Regulatory tech, particularly in managing the billion transactions, presents an additional opportunity. Startups addressing digitization challenges, such as land records and government assets, are poised for substantial growth.
Prakash acknowledges the challenges faced by the Indian startup ecosystem in 2023, describing it as a “humbling year.” With just one unicorn minted this year (Zepto), a significant slowdown from the 43 unicorns in 2021, he urges existing unicorns to focus on profitability and explore opportunities to go public. The upcoming year is anticipated to witness a surge in startups prioritising profitability and making strategic moves toward public listings.
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Featured Image: Credit: Accel
