Published on March 3, 2025
In AI Startups

Will Micro VCs Fuel the Next $1 Billion Indian AI Startup?

Micro VC’s ability to invest at valuations of $1 million to $8 million allows them to take early bets on disruptive AI startups before mainstream investors take notice.

Image by Diksha Mishra

By Vandana Nair

India’s AI landscape is witnessing rapid growth, however, access to early-stage capital remains challenging. While large venture capital (VC) firms and global investors often back late-stage AI startups, early-stage funding is increasingly scarce. This is precisely where micro VCs step in and fill the funding gap. Shift to MicroVCs The Indus Valley Annual Report 2025 (Blume Report) highlights a clear trend: larger seed rounds or ‘mango seeds’ (>$3 million) now account for half of total early-stage funding, while sub-$1 million rounds have significantly declined. This shift has made it harder for first-time AI founders to secure capital, opening up opportunities for micro VCs to step in. “India’s innovation ecosystem depends heavily on micro VCs

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Vandana Nair

As a rare blend of engineering, MBA, and journalism degree, Vandana Nair brings a unique combination of technical know-how, business acumen, and storytelling skills to the table. Her insatiable curiosity for all things startups, businesses, and AI technologies ensures that there's always a fresh and insightful perspective to her reporting. She now hosts her tech segment 'Point Break' on AIM Tv.