Krutrim: How Ola Founder's AI Startup Became India's First Unicorn of 2024

Artificial intelligence (AI) is one of the most disruptive and innovative technologies of the 21st century. It has the potential to transform various industries and domains, such as healthcare, education, agriculture, finance, and more.

That’s where, the recent success of Krutrim, an AI startup that became India's first AI unicorn after raising $50 million in funding, is a remarkable achievement and a game-changer for India's Startup ecosystem. In this article, we will explore how Krutrim achieved this feat, what are its financials, and what are its future prospects and potential.

Krutrim is an AI startup founded by Ola founder Bhavish Aggarwal in 2023. It aims to build a large language model that can understand and speak multiple Indian languages, as well as an in-house capability to manufacture chips optimized for AI compute. The startup claims to be the first Indian AI unicorn, as well as the fastest Indian startup to reach a $1 billion valuation. It achieved this milestone after raising $50 million in its first equity round, led by Matrix Partners India and other investors, in January 2024. The startup plans to launch a beta version of its eponymous chatbot in February 2024, followed by APIs for developers and enterprises later in the year.

Krutrim, which means "artificial" in Sanskrit, is not just another AI company. It is building a complete AI computing stack, from data centers and servers to edge devices and supercomputers, to power AI applications for India and the world. It is also developing its own large language model, trained on over 2 trillion tokens and incorporating the largest representation of Indian data, to enable voice-enabled conversational AI assistants that can understand and speak multiple Indian languages.​

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Krutrim's ambitious goals extend beyond language processing. The startup envisions contributing significantly to India's AI capabilities by fostering a community of developers and researchers. Bhavish Aggarwal, the founder, expressed his vision of making Krutrim a catalyst for AI innovation in India. The $50 mn funding round marked a significant milestone for Krutrim that emphasizes the investor community's confidence in its potential. Matrix Partners India, a key contributor to the funding, highlighted the strategic importance of Krutrim's mission in enhancing India's technological prowess. The company did not disclose its exact revenue figures, but said it has been growing at a compound annual growth rate (CAGR) of over 100% since 2023. The company also said it has over 500 customers across various sectors, such as e-commerce, education, healthcare, media, and government.

The company aims to expand its AI offerings beyond large language models (LLMs) by introducing Krutrim Pro, a sophisticated multimodal model with enhanced problem-solving abilities across various tasks.

The company’s valuation of $1 bn reflects the huge potential of the AI market in India, which is expected to reach $70-100 bn by 2025 and $300-400 bn by 2030, depending on how rapidly the ecosystem evolves. India has the advantage of a large and diverse population, a rich linguistic and cultural heritage, a strong talent pool, and a vibrant startup scene. However, India also faces challenges such as data scarcity, quality, and privacy, lack of infrastructure and resources, and ethical and social implications of AI.

Krutrim's Valuation: Based on Potential 

The valuation of a startup is the product of the funding raised and the % of equity given to the investors.

Krutrim's valuation is based on its potential to create innovative AI solutions for the Indian market, which has a huge demand for conversational AI assistants and multilingual applications. The startup claims that its language model, dubbed Llama3, will be more powerful than OpenAI's GPT-4 and Google's Gemini, which are currently the state-of-the-art in natural language processing.

Krutrim's valuation is also influenced by the reputation and track record of its founder, Bhavish Aggarwal, who has successfully built and scaled Ola and Ola Electric, two of India's leading mobility startups. Bhavish Aggarwal is known for his vision, ambition, and execution, as well as his ability to attract talent and funding from global investors.

Krutrim's Competitive Advantages 

Krutrim has several competitive advantages that may give it an edge over its rivals in the AI market. One of them is its focus on the Indian market, which has a diverse and complex linguistic landscape, with over 20 official languages and hundreds of dialects. Krutrim aims to build a language model that can not only understand and speak multiple Indian languages, but also capture the nuances, contexts, and cultural references of each language.

Another competitive advantage of Krutrim is its innovation in AI hardware and software. The startup is developing its own AI chips and data centers, which are optimized for its language model and its AI applications.  The startup is also planning to use Meta's AI optimized data center in Jeffersonville,  which is equipped with advanced hardware, including liquid-cooling systems, to meet the intensive computing demands of AI. Meta is also working on a new AI model, called Llama4, which will be even more powerful than OpenAI's GPT-4 and Google's Gemini. Krutrim hopes to collaborate with Meta on Lama4 and leverage its AI expertise and resources.

Startup Funding Trends in AI Space

Uniphore, a global conversational AI technology company, received the highest funding of $400 Million in 2022 through a Series E round.

According to the AI Startup Funding & Acquisition Report 2023, Indian AI startups raised a funding of $ 1.11 Billion across 47 funding rounds in 2023. This is a marginal increase of 0.1% compared to the previous year. However, the number of funding rounds decreased sharply from 135 in 2022 to 47 in 2023. This indicates that the funding landscape for AI startups in India has become more selective and competitive, with investors looking for more mature and scalable businesses.

Among the 47 funding rounds in 2023, only four were late-stage deals, accounting for 21% of the total number of rounds and 59% of the total value raised. This shows that late-stage funding is scarce and concentrated in a few high-performing startups. Krutrim was one of them, raising the highest amount of $50 million in a Series A round. This implies that Krutrim has demonstrated a strong product-market fit, a large and growing customer base, and a clear competitive advantage over other AI startups.

Krutrim's unique approach lies in its commitment to addressing linguistic diversity. With a focus on creating an extensive language model, the startup aims to overcome barriers in communication by providing a nuanced understanding of various regional languages. This inclusivity aligns with India's cultural diversity and opens new possibilities for AI applications.

In a rapidly evolving technological landscape, Krutrim's emphasis on AI-optimized chips is a strategic move. By developing in-house chip capabilities, the startup aims to enhance the efficiency and performance of AI computations, contributing to advancements in the broader field of artificial intelligence.

Krutrim's ascent to unicorn status signifies more than just a financial milestone. It symbolizes the potential of AI to drive innovation, bridge linguistic gaps, and redefine the technological landscape in India. As the startup continues to chart new territories, the legacy of Krutrim as a pioneer in AI innovation is poised to leave an indelible mark on the nation's startup ecosystem.