Emergent raises $300mn as India adds second AI unicorn in a month

Emergent, a Bengaluru-based artificial intelligence software start-up, raised $300mn in a Series C round that valued the company at $1.5bn, the company said on Wednesday. The financing makes Emergent India’s second AI company in a month to cross the $1bn valuation threshold, following a recent funding round for Sarvam.

The round was led by Creaegis, an investment firm based in Bengaluru, with participation from Claypond, an Indian family office, and Sentinel Global, a California-based fund. Existing backers Khosla Ventures, SoftBank Vision Fund 2, Lightspeed and Y Combinator also invested, according to Emergent’s release.

Emergent was founded a year ago and builds tools for entrepreneurs and smaller companies that want to create software without traditional coding skills. Mukund Jha, the company’s co-founder and chief executive, said Emergent was designed for non-technical founders and small business owners, and that 70 per cent of its users had no previous coding experience. The company said about 12mn apps were created on its platform over the past year by small business owners and solo entrepreneurs.

The company’s valuation follows Sarvam, described as a full-stack sovereign AI company, which recently secured a $1.5bn post-money valuation. Together, the two deals have drawn attention to India’s position in artificial intelligence, a field where the country has significant software talent but remains behind the US and China in several core infrastructure areas.

Application layer strength

Deepika Giri, head of research for AI, analytics and data at IDC Asia Pacific, told CNBC that the financings fit with wider activity the research group is tracking. She said almost half of Indian enterprises are already testing agentic AI systems, which she described as unusually rapid experimentation and workforce automation for a market of India’s size.

IDC expects 45 per cent of Indian organisations to use specialised cloud services by 2026 to secure computing capacity, a constraint for both AI model training and inference. Training is the process of building or improving a model using data and computing power, while inference is the use of a trained model to produce outputs for users or applications.

IDC also said India has the broadest AI accelerator stack in Asia-Pacific, spanning Nvidia, AMD and hyperscaler silicon. AI accelerators are chips or hardware systems used to run demanding AI workloads. Hyperscaler silicon refers to chips designed by large cloud computing companies for their own data centre operations.

Mohammad Hassan, head of Asia-Pacific dividend forecasting at S&P Global Market Intelligence, told CNBC that Sarvam’s raise showed investor confidence in indigenous and multilingual AI intellectual property. He said Emergent’s financing underscored the depth of Indian technology talent, while describing the recent developments as positive signals rather than proof of a decisive shift.

Infrastructure gaps remain

India still lacks domestic production of leading-edge AI chips and does not yet have a frontier-scale foundation model comparable with leading US or Chinese systems, according to CNBC. Its data centre capacity also trails the largest AI markets, based on data cited from JLL.

The government has sought a larger role in the sector. At a global AI summit in February, Prime Minister Narendra Modi said India should rank among the world’s top three AI powers by 2047, not only as a user of the technology but also as a creator.

India’s established IT services export base gives it a large pool of software engineers for building AI applications, CNBC reported. Access to foreign foundation models remains a risk, however, as governments place greater strategic weight on advanced AI systems.

Neil Shah, vice-president of research at Counterpoint Research, told CNBC’s Inside India that it would take at least three to four years for India’s AI ecosystem to reach the point where it creates a self-reinforcing growth cycle.

This story draws on original reporting from CNBC.