Agentic AI is a sophisticated algorithm that can adapt and learn on its own, building on the success of large language models like ChatGPT that require human inputs to train them. Built for a specific field, agentic AI resembles a worker skilled in a certain task—such as customer service, invoicing and more—and operates as a network of skilled professionals to automate tasks.
Earlier this week, decade-old health-tech firm Innovaccer announced the launch of seven artificially intelligent ‘agents’, purpose-built to ease the lives of overworked doctors and medical staff around the world. The San Francisco-based startup has raised $275 million for its ‘healthcare intelligence cloud’—a suite of digital services assisting hospitals and clinics in various tasks.
The funding round saw six top VC firms, including Facebook cofounder Eduardo Saverin’s Singapore-based B Capital Group, and Microsoft’s investing arm M12 participate.
Indian venture capital firms are also scouting for potential investment opportunities in some of the world’s most promising agentic AI ventures in India and overseas.
In April last year, Plotch.ai raised an undisclosed pre-seed funding round from marquee VCs including Antler and Peak XV Partners (formerly Sequoia Capital India). The same month, AI sales automation platform SiftHub raised $5.5 million in seed funding from Matrix Partners and Blume Ventures, among others. In September 2024, Bengaluru-based CoRover.ai raised $4 million as part of its series-A funding round, led by Mumbai-based multi-stage VC fund, Venture Catalysts.
Last month, US-headquartered Indian-origin agentic AI startup Atomicwork raised $25 million in series-A funding, bringing Khosla Ventures, one of the world’s top VCs, to the table. Blume Ventures and Peak XV were also part of the round.
The agentic AI market is expected to swell from $5.1 billion to about $47.1 billion by the end of this decade, according to a report by French IT firm Capgemini. That’s a potential compounded annual growth rate of 45%, underpinning VCs interest.
The entire generative AI market is projected to generate $356 billion in revenue globally by 2030.
“Even though the technology is in nascent stages—closer to OpenAI’s ChatGPT 3.0—the excitement around agentic systems is about the potential of completely automating repeatable tasks that were taking up a lot of effort,” said Prayank Swaroop, partner at Accel, which has started investing in the technology.
For instance, a company can deploy a network of ‘agents’ or algorithms that are individually skilled at accounting, monitoring factory production rates or processing customer queries. Each such AI agent work together, much like a back-office team of employees, but with significantly lesser human intervention.
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Agentic AI is live
Blume is “very bullish on the potential for agentic AI startups to redefine both specific industry verticals, and functional use-cases that are more horizontal and will double down on this space this year as well,” said Sumangal Vinjamuri, associate vice-president at the venture capital firm. “We think that agents have the potential to own end-to-end outcomes and workflows in these scenarios, and we are already starting to see that happen through some of the above portfolio companies.”
Solutions offered by some of these startups have already been deployed. CoRover’s agentic AI powers Indian Railways’ online ticketing platform, Delhi Metro Railway Corp’s automated ticketing and operations platforms, and IRCTC’s ‘Disha’ chatbot.
“We’re generating a steadily rising annual revenue already from our clients, and we’re deploying agentic AI systems for numerous public and private firms,” said Ankush Sabharwal, cofounder and chief executive of the company. “This has drawn a high amount of interest from some of India’s top VCs, which we’ll make public soon as part of our ongoing series-A funding round.”
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At fellow startup Kogo AI, geo-mapping firm MapMyIndia invested $2.5 million in two tranches—returning for an additional $1 million as part of this round in October 2023.
“In the past four-five months, we’ve gotten contracted revenue of $870,000,” Raj Gopalakrishnan, cofounder of Kogo, told Mint. “By end-February, we should cross $1 million, and by end-May, we should cross $4 million.”
Bengaluru-based agentic AI startup Quash raised $635,000 in pre-seed funding from Arali Ventures, Java Capital, Matrix Partners and more.
Accel India’s agentic AI investments include being part of a $36 million round for US-based startup Ema, and a $220-million seed round in Paris-based agentic AI firm, ‘H’. The fund is investing in “tooling, memory, and the infrastructure side of building agentic AI systems,” Accel’s Swaroop said.
Still nascent
VC firms are betting that companies will soon start allocating tech budgets for agentic AI.
“In enterprises who want to stay competitive on efficiency and velocity, agents will see reallocation from not just software budgets but also people budgets,” said Vinjamuri of Blume. “Enterprises across the world over the last 12-18 months have already started moving AI use-cases from experimental budgets to actual line items, backed by clear RoI and impact.”
Still, not everyone agrees that Agentic AI will cause the level of disruption that generative AI brought.
“No matter how good the underlying models are, there will be errors, edge cases and hallucinations. These errors get cascaded and compounded over multiple steps, leading to poor accuracies,” said Stellaris Venture Partners’ Alok Goyal. Agentic AI systems, according to him, will be restricted to low risk and low complexity use cases, at least for the near- to mid-term.
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