Startups that are building local infrastructure for artificial intelligence companies in India will see a good market for their products and interest from investors, said angel investor Hari Balasubramanian.
“There is a great opportunity to bring down the cost of processing and in terms of the software layers which can be built around the graphics processing units (GPUs) so that it can be shared across people. That is where most money is going for people who are into AI — to train and use the GPU,” he told FE in an interaction, on the sidelines of Startup Mahakumbh.
Balasubramanian, who is also a member of the Indian Angel Network, has been an angel investor in food companies such as Wow! Momo, and Box8, online fashion store FabAlley and used car platform Spinny, among others. He believes the current dampened funding environment provides a good opportunity for angel investments, who usually invest with a seven to10-year horizon.
He added that while it is a good time for early-stage investments, there is a challenge for late-stage startups to show good traction and a path to profitability to get investors to commit. Balasubramanian said that profitability is important for companies that have found its product-market fit, but not for those which are still developing their models.
“Companies which are discovering business models and are into research, such as AI and deep tech startups, we don’t expect profitability from them. But companies which have got funding earlier and have been operating for seven-10 years, they need to provide exits to their investors and exits can happen only when you can show profitability,” he said.
Besides AI, Balasubramanian is also bullish on new-age food companies in India, and fashion brands that can cater to Gen-Z buyers. He said that the Indian market has space for several food brands to co-exist and is not a “winner-takes-all” industry.
“This market will have number of winners. You can have number one to number one hundred because the market is so huge and different in every region,” he added.