Five-month-old Indian AI startup Sarvam scores $41 million funding

Sarvam AI has come out of stealth mode and announced it has raised $41 million as the five-month old Indian startup races to build a suite of full-stack generative AI offerings.

The $41 million funding raise is across the Seed and Series A financing rounds. Lightspeed led the Series A round, whereas it co-led the Seed with Peak XV Partners. Peak XV and Khosla Ventures also participated in the Series A funding.

The Bengaluru-headquartered startup is building large language models that support Indian languages, Sarvam AI Vivek Raghavan told TechCrunch. The startup is also creating a platform that will allow businesses to build with LLMs — “everything from writing an app, deploying it to popular channels, observing logs, and custom evaluation,” he said.

Sarvam AI is also focusing on building LLMs that use voice as the default interface in India. This strategy, combined with its emphasis on supporting local languages, aims to cater specifically to the Indian market’s requirements.

“This requires us to change the architecture of existing open models and to train them in custom ways to teach the new language. The advantage is that the resultant models are more efficient (in terms of tokens consumed) for understanding and generating Indian language than any of the existing LLMs,” said Raghavan.

Sarvam was founded by Raghavan and Pratyush Kumar, both of whom previously worked at tech veteran Nandan Nilekani-backed AI4Bharat of IIT Madras, about five months ago. Raghavan additionally spent more than a decade at UIDAI, the entity overseeing the omnipresent Indian identity system Aadhaar.

“I have seen first hand the enormous value in innovating at foundational layers and deploying at population scale,” he said. “India has demonstrated that it can harness technology differently, and with GenAI we have an opportunity to reimagine how this technology can add value to people’s lives.”

The startup plans to make its first model public over the coming weeks.

The investment in Sarvam comes at a time when investors globally are rushing to identify and back AI breakthrough, banking on the thesis that advances in AI will make countless industries more efficient and startups at the forefront will deliver generational returns.

Despite being home to one of the world’s largest startup ecosystems, India has yet to make a material impact in the rapidly advancing AI arena. No homegrown Indian contenders have emerged to challenge the dominance of large language model titans such as OpenAI’s ChatGPT, Amazon–backed Anthropic, or Google’s Bard. (Indian powerhouse Reliance partnered with Nvidia in September, revealing plans to build a large language model that is trained on India’s diverse languages.)

“We see several countries having sovereign efforts to build GenAI models given its strategic importance. We need companies like Sarvam AI to develop deep expertise for building AI in and for India,” Khosla Ventures founder Vinod Khosla said in a statement. Khosla Ventures was the first institutional investor in OpenAI, turning a $50 million investment into a $5 billion return.

Hemant Mohapatra, Partner at Lightspeed, said Sarvam AI has a “unique approach” to combine model innovation and application development to build “population-scale” solutions for India. He added, “Lightspeed will be close partners and contribute with our deep capital stack and learnings from our global platform.”

Peak XV and Lightspeed India took less than a week to invest in Sarvam AI’s seed funding round earlier, according to a source with direct knowledge of the event.

“The Sarvam AI team led by Vivek and Pratyush is among the highest calibre AI teams we have seen emerge from India,” said Harshjit Sethi, Managing Director of Peak XV, in a statement.

“Vivek’s expertise in building large scale systems with Pratyush’s domain expertise in AI makes them uniquely positioned to build population scale AI applications. Large scale adoption of AI in India will require not only building uniquely Indian use cases but also delivering them at prices that everyone can afford and we believe the Sarvam team is best positioned to accomplish this.”