Indian startups may not always lead the first wave of innovation but they have consistently built stronger second and third-wave companies, Shekhar Kirani, Partner at Accel, has said.
Several Indian success stories — from Flipkart, Zomato to Freshworks — emerged only after the model had been proven elsewhere, Kirani said at Upekkha’s Vibe Summit in Bengaluru on July 11.
“Flipkart wasn’t the first e-commerce player. Swiggy and Zomato weren’t the first food delivery apps. Freshworks wasn’t the first helpdesk software,” he said. “But we observe, we learn, and we build stronger second and third-wave companies.”
He expects the same pattern to play out in the era of AI, especially over the next 12 to 24 months.
“The first wave of fast-moving, PLG-led companies focused on metrics like revenue per employee but that can’t be the only story,” he said. “In the next wave, I believe we’ll see extraordinary companies from India emerge — but they won’t look like the Valley-style PLG startups.”
He was referring to product-led growth (PLG) companies that priortise product use and the user experience to drive growth.
Skip horizontal. Go deep into verticals.
While horizontal AI apps are gaining users quickly, especially among hobbyists, Kirani said they rarely find real, enterprise use cases.
“Sixty percent of Lovable’s users are hobbyists who’ve never written an app before. They’re adding $20–30 million in ARR every month but how many of those apps are used in real businesses? Very, very few,” he said, talking about the AI-powered platform that allows users to build full-stack applications using natural language prompts.
Instead, he urged Indian founders to focus on domain-heavy sectors where AI adoption requires deep understanding of workflows and data.
“In areas like insurance, healthcare, retail, legal, and accounting, AI alone can get you to 90 percent accuracy but that’s not enough. You need 99 percent and for that you need domain expertise, workflow understanding, and human-in-the-loop systems,” he said.
Build where others aren’t looking
Kirani encouraged founders to avoid copying popular developer-focused products and instead go after deep, overlooked opportunities.
“Everyone’s trying to build the next Lovable but we don’t have access to OpenAI teams or the white-coding hobbyist culture. We will lose that battle,” he said.
“Instead, we should hammer out solutions in overlooked verticals, where nobody else is looking.”
He shared an example from the US restaurant industry, a trillion-dollar sector where much of the ordering still happens over phone calls.
“Just automating that supply chain could lead to $25–50 billion in labour savings. I can think of 50 startups in that category alone.”
AI-first startups are in demand and capital is chasing them
Kirani said the environment is favourable for AI-first founders, especially those who demonstrate market clarity and execution depth. “If you understand the market structure and how you win, you’ll have unlimited money. Raising isn’t the milestone, it’s the outcome of clarity.”
Global enterprise spend on vertical AI, industry-specific artificial intelligence systems, is projected to surge from $5 billion in 2024 to $47 billion by 2030, growing at over 40 percent CAGR, according to the VIBE50 Vertical AI Report 2025 by AI startup accelerator Upekkha.
The report, launched on July 10, identifies 50 Indian vertical AI startups that are building deep-tech solutions for sectors such as finance, healthcare, manufacturing, logistics, and energy. These are real businesses with live deployments and growing revenue, not just prototypes or pitch decks.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
