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The AI Rush In SaaS: How Indian VCs Are Reinventing Their Thesis
- In mid-2024, AI became a foundational pillar for Indian SaaS startups, with AI-based ventures receiving significant funding.
- Investors now focus on the depth of AI integration, seeking businesses built with AI at the foundational level for defensibility.
- Indian SaaS is evolving around AI, reshaping investor priorities and funding decisions in the process.
- The shift from cloud-first to AI-native SaaS has fundamentally changed how intelligence is built into applications.
- AI-native startups exhibit a higher level of AI integration, using proprietary data to create defensible tech moats.
- Investors evaluate startups based on factors like data quality, data flywheel, and technical rigor in AI-native offerings.
- AI's impact on SaaS investments is prompting a shift towards evaluating AI-driven metrics and AI modeling choices.
- India's SaaS edge lies in frugal innovation, a large tech workforce, and digital adoption, but challenges with talent and infrastructure persist.
- The future of SaaS investing revolves around proprietary data, AI-native architecture, execution speed, and features like multimodal AI.
- SaaS startups must prioritize responsible AI implementation as digital footprints grow and the need for trust and security increases.
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