Accel’s Prakash Identifies GenAI, Climate, and Fintech as Hot Bets for Investors Next Year

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In the upcoming year, venture capitalists and entrepreneurs are anticipated to focus on generative artificial intelligence (AI), climate tech, and fintech, according to Prashanth Prakash, the founding partner of global venture capital firm Accel Partners in India. Prakash highlighted that while approximately $25 billion has been globally invested in building Generative AI (Gen AI), a significant portion of this capital has yet to reach India, presenting substantial opportunities for startups in the country.

Speaking at the Bengaluru Tech Summit, Prakash suggested that Indian startups are well-positioned to contribute to the Gen AI landscape by building infrastructure that facilitates the deployment of Generative AI. He emphasized the potential for startups to create applications on top of Gen AI, focusing on specific areas rather than developing large learning models or compute-intensive AI businesses.

Generative AI, a form of artificial intelligence capable of producing diverse content, such as text, imagery, audio, and synthetic data, is expected to disrupt various sectors, including marketing, and healthcare (particularly drug discovery), and create opportunities for collaboration across different industries.

Another significant opportunity highlighted by Prakash is climate technology. Indian startups are shifting from building tech platforms to creating physical products and platforms to address climate challenges, particularly those impacting India. Prakash emphasized the importance of manufacturing in India, with investors and startups exploring areas like sustainable manufacturing, Industry 5.0 (collaboration between humans and robots), the Internet of Things (IoT), blockchain, and AI in manufacturing.

Fintech is identified as another major area of interest due to the billion-scale transactions expected in India, driven by the projection of 1 billion smartphone users by 2026, with rural areas contributing significantly to the adoption of internet-enabled phones. Regulatory tech on top of these transactions is considered a promising opportunity, along with digitization prospects for land records and other government assets. Prakash anticipates that India will play a pivotal role in the emergence of a new generation of manufacturing, drawing attention from both investors and founders.