ENA Sectors 2025-07-08 16:32:23 <p><span style="font-size:14px"><strong>New Delhi, Jul 8 (KNN) </strong>A growing number of Indias leading venture capital firms are investing in a new wave of AI-first startups aiming to boost the traditional IT services industry.</span></p> <p><span style="font-size:14px">Firms such as Peak XV Partners, Stellaris Venture Partners, Accel, and Elevation Capital are actively scouting early-stage startups building AI-native solutions for application development, software testing, infrastructure management, and customer support.</span></p> <p><span style="font-size:14px">Rajan Anandan, Managing Director at Peak XV Partners, noted that AI is making IT services more efficient and cost-effective, opening opportunities for startups to offer leaner, high-quality alternatives.</span></p> <p><span style="font-size:14px">Peak XV is currently assessing startups that automate application maintenance and other core IT functions using AI agents.</span></p> <p><span style="font-size:14px">Rather than replacing existing IT service giants, these AI-driven firms are being built from the ground up to deliver faster and smarter services.</span></p> <p><span style="font-size:14px">Venture capitalists are focusing on both horizontal players addressing cross-industry needs and vertical startups targeting sectors like healthcare, banking, retail, and insurance.</span></p> <p><span style="font-size:14px">Stellaris Venture Partners has already funded two such startups. Partner Ritesh Banglani emphasised Indias unique advantage in scaling tech-enabled services, especially in disrupting KPO functions such as accounting, legal support, and wealth management. Tech-first service startups can build distribution faster than legacy firms can build tech, he said.</span></p> <p><span style="font-size:14px">Accel India is also bullish on AI-first ventures, particularly in verticals like legal, insurance, and accounting. Anagh Prasad from Accel believes these companies can deliver service-like pricing while earning software-level margins.</span></p> <p><span style="font-size:14px">Krishna Mehra of Elevation Capital predicted a major shift in BPO, KPO, and customer support, with even legacy IT firms facing AI-driven transformations.</span></p> <p><span style="font-size:14px">Industry data already shows a shift: IT revenue grew by 5.1 per cent in FY25, while workforce growth slowed to 2.2 per cent, indicating increased automation.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 42734 https://knnindia.co.in/news/newsdetails/sectors/venture-capital-firms-bet-big-on-ai-first-startups-to-boost-it-services 2025-07-08 16:32:23 knnindia.co.in