Industry Odisha Bureau, Sep 29: Investors are deciding faster on India’s strongest early-stage AI teams. Rapid product cycles leave little room to wait. Competition for deals is rising. Yet scrutiny of startup quality has not vanished.*
For venture investors backing Indian AI startups, patience is becoming expensive. A few months of waiting can now mean missing a deal. It can also mean backing a product already overtaken. For the strongest early-stage teams, the investment clock is shrinking.
Money moves faster
AI funding in India has climbed steadily, according to data platform Tracxn. It rose from $340 million in 2020 to $1.1 billion in 2025. About $1.4 billion has been raised so far in 2026.
Top teams can now see term sheets in as little as two weeks. Previously, the process took about a month.
Kushal Bhagia is founder and partner at early-stage fund All In Capital. He says seed rounds once took three to four months. The strongest AI teams now close them in three to five weeks. In some cases, he says, term sheets arrived within 10 days of first contact. Less-proven companies and larger rounds can take considerably longer.
Technology sets the pace
AI’s pace of change explains much of the urgency. A startup may spend months building a feature for one use case. A global player such as OpenAI or Google may then release something similar. That can blunt the startup’s edge and weaken customers’ willingness to pay.
Chinmay Bhosale co-founded legal AI startup NYAI, which recently raised about $1.5 million (₹13 crore). His view is blunt: firms that stop evolving for six months will not survive.
Rivals at the table
More capital has also brought more contenders. Tracxn counts 186 AI funding rounds in 2025, up from 106 in 2020.
Bhagia argues that funds waiting for another quarter of data face two risks. They may pay far more later, or miss out entirely. Founders also iterate faster, he notes, as AI products reach users more quickly and cheaply.
Creedom.ai, an AI-powered creative intelligence platform, raised around ₹4.1 crore this September. Its term sheet arrived in roughly two weeks. Chief executive and co-founder Naveen Murugan says investors still assess the product, metrics and market. Their answer, he says, now comes within weeks rather than months.
Speed is not a free pass
Investors insist that faster term sheets do not mean skipping diligence. Bhagia places more weight on retention than on early revenue. Pilots can generate AI revenue quickly but prove little about lasting demand. The real test, he argues, is whether customers keep returning. He prefers 50 users who cannot do without a product. Five hundred who tried it once impress him less.
Growth capital moves differently
Vikas Choudhury runs growth-stage fund Playbook as founder and managing partner. He says the speed-up is mainly an early-stage phenomenon, where development moves fast. At growth stage, investors still examine revenues, quality, diligence and growth models.
A familiar pattern
Shivakumar Ramaswami heads Bengaluru-based investment bank IndigoEdge as founder and managing director. He says quick term sheets follow whichever sector investors crowd into. He cites e-commerce in 2012-14 and hyperlocal businesses in 2015-16. Content followed around 2018, then edtech and SaaS in 2021. AI, in his view, is simply the latest wave.
Speed without certainty
AI has compressed both product cycles and investment decisions. Faster capital, however, does not guarantee durable companies. Lasting startups will still need distinct products and customers who keep returning.
