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How Arise Ventures' AI Rethink Is Shaping Its INR 500 Cr Bet On Consumer, Climate & Enterprise Tech

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Venture capital across the globe has never been more obsessed with artificial intelligence (AI). Consider this. Out of the total U.S. deal value — $91.5 Bn, to be precise — 71% flowed into AI investments in the first quarter of 2025 (Jan-March). Of course, this would not have been possible without the SoftBank-led $40 Bn funding secured by OpenAI, a record amount ever raised by a private technology company. But even if we exclude the marquee deal, AI still secured 48.5% of the total investment amount in the US.

Globally, VC funding reached $126.3 Bn in the quarter, up from $118.7 Bn in Q4 2024, despite a drop in deal volume from 8,801 to 7,551. The data underscores how the growing dominance of AI is supercharging investor sentiment even as funding in other sectors continues to taper off.

In India, too, the AI market is poised for significant growth, with projections suggesting it will exceed $17 Bn by 2030. In the past five years, AI-native startups across the country have seen a 5.4x rise in venture capital funding, securing more than $1.5 Bn.

This surge is driven by sustained investor interest and the broader adoption of application-layer solutions, as detailed in Inc42’s latest report titled. A recent C-suite GenAI (generative AI) survey by EY India also indicates that across the country have moved beyond the proof-of-concept and are integrating existing software to ensure production-ready deployment.

Although the country is still building momentum around foundation models (think of OpenAI or Anthropic, which offer core solutions to power many applications), new-age startups aggressively building out AI capabilities have captured the attention of tech-forward venture firms. Among them is Arise Ventures, an early stage VC player with a sharp thesis that transformative, category-defining innovations will shape the future of business and drive sustainable growth.

Arise was founded in 2020 by Ankita Vashistha, a Stanford alumnus and a seasoned professional in the private equity and venture capital space. The VC firm operates out of Bengaluru and San Francisco, targeting early stage startups in consumer, climate and enterprise tech. It primarily focusses on those operating at the intersection of AI, deeptech and other frontier technologies to build businesses that matter in a fast-evolving global ecosystem.

In the consumer space, the VC firm backs next-generation brands and consumer tech initiatives that are reimagining legacy industries and reshaping everyday experiences. Its climate portfolio centres on sustainable food systems, waste management and broader sustainability solutions to resolve the global climate crisis.

On the enterprise front, Arise invests in B2B SaaS, fintech, healthtech, cybersecurity and core deeptech platforms, supporting companies that drive innovation and enhance operational efficiency.

“Our thesis is built around companies where artificial intelligence and deeptech form the very foundation of the business,” said Vashistha, founder and managing partner at Arise Ventures. “We look for founders who are not only building differentiated technologies but are ready to scale globally.”

With a sector-driven approach, a cross-border investment lens and active involvement in go-to-market (GTM) execution, Arise is not a hands-off capital provider. Instead, it has positioned itself as a strategic partner in building enduring startups and helping them scale across global markets, especially in the US.

The VC firm recently announced the first close of its Fund I at INR 150 Cr, part of an INR 500 Cr corpus aimed at supporting scalable, impact-led businesses. The fund targets pre-seed and seed-stage companies, particularly those demonstrating early revenue traction. It is expected to reach its final close by the end of 2025.

It has already deployed capital into 12 startups from its current fund, maintaining a 70:30 investment split between Indian and the US-based entities. Its India portfolio includes Streamingo.ai (a video intelligence platform), Assiduus (an AI-powered cross-border ecommerce accelerator), Outdoor Goats (a vertical, multi-brand D2C marketplace), Meolaa (an online marketplace offering sustainable fashion and lifestyle products) and Inc42 (a digital media platform focussing on technology and startups).

For Arise, long-term value is not measured by the deal value or volume but by early and meaningful engagement. In fact, 55-60% of its corpus is earmarked for follow-on investments, but it is only for portfolio startups that meet performance milestones.

“Any good founder can raise capital nowadays. Our role is to help them grow the business beyond funding by opening up new markets, helping forge strategic partnerships and crafting the right GTM strategy,” Vashistha told Inc42 during a one-to-one interaction for the ongoing Moneyball series.

And she was right. Even prominent investors like Marc Andreessen have expressed scepticism about the long-term value of AI models, warning it can be a “race to the bottom” as competitive advantages erode with time.

What matters most is finding differentiated use cases and tapping into the kind of sharp, industry-savvy guidance that ‘woke’ investors can provide. The rise of DeepSeek has been a wake-up call, showing that pouring billions does not always lead to the top of the innovation ladder or allow one to stay ahead of the curve for long.

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The Beginning: From Private Equity To Setting Up The First VC Fund

Vashistha began her journey in 2009 at Aureos Capital, a London-based private equity fund specialising in emerging markets. She played a pivotal role, working closely with a global team to raise new funds and manage a diverse portfolio spanning Asia, Africa and Latin America. The experience provided a ringside view of how strategic funding could drive scale and shape outcomes across diverse economic landscapes.

By 2011, early stage venture capital had begun to gain momentum in India and Southeast Asia. So, she returned to the region, motivated by the opportunity to support founders at the grassroots. In Singapore, she helped establish Wavemaker Labs as a limited partner (LP) in a government-backed accelerator and also joined the board of Tholons Capital in 2013. It was a global family office with investments spanning PE/VC, debt and public markets.

At Tholons, Vashistha launched a $20 Mn angel fund to support startups across India and Southeast Asia, leveraging a single anchor LP and a dual-domicile structure. Her engagement with India’s fledgling startup ecosystem also deepened, notably through her involvement with the Indian Angel Network.

Her early investments included Uniphore, Licious and Luxola, startups that emerged as category leaders in enterprise AI, D2C meat and seafood business and online beauty retail, respectively. These formative experiences reinforced her interest in under-represented founders, especially women, who were frequently present in pitch meetings but rarely led their teams.

From Saha Fund To Arise: Why The Gender Lens Evolved To ‘Inclusive’ Capital

When Vashistha launched the INR 100 Cr Saha Fund in 2015, it was positioned as India’s first women-led, tech-focussed VC fund supporting female entrepreneurs. It was a bold approach in a market where gender diversity in capital allocation saw a persistent gap. Her inspiration came from years of experience across Wavemaker Labs and Tholons Capital, where she had begun to notice recurring blind spots in how the capital flowed and whom it reached.

Saha Fund quickly carved out a distinct niche and backed as many as 11 startups across sectors. Among these were hyperlocal ecommerce platform LoveLocal, wellness marketplace Fitternity and AI-powered HRtech startup My Ally (it was acquired by Phenom in 2020). The investment thesis was tight, operationally involved and impact-oriented. As its portfolio of startups matured and scaled, the founder eventually exited them, delivering 3x the returns to investors.

By 2023, however, the VC landscape had shifted, and so had Vashistha’s vision. When she rebranded Saha Fund as Arise Ventures, the change was anything but cosmetic. It indicated a strategic broadening of scope. While the original fund had a singular focus on women-led startups and investors, Arise saw an evolution, one that retained Saha’s operational discipline and gender-sensitive ethos but expanded to a more inclusive pipeline of founders and funders. Nevertheless, women-led startups still account for nearly 60% of Arise’s portfolio.

Its investment playbook currently targets pre-seed and seed funding, an area Vashistha believes is ripe for innovation. More importantly, one can identify promising startups very early on and support them as they transition across growth stages.

A Four-Pronged Accelerator Programme To Support Startups & Founders

Vashistha’s journey as an investor reflects a broad shift in India’s venture capital landscape. Beyond capital, it is also about a hands-on, value-driven approach, with an emphasis on mentoring, strategic support and providing access to global markets such as the US.

But breaking into the U.S. market remains a tough challenge for Indian startups due to their limited local presence and credibility issues. Arise Ventures fills this gap by connecting startups to its global networks, offering real-time support, and working through sales and pricing dynamics tailored to meet market requirements.

To help realise startups’ goals, Arise runs a flagship accelerator that receives nearly 5K applications every year from India and the US. Only around 100 startups make the cut for a 12-week programme. Those who qualify have access to capital, valuable mentorship and partnerships with global giants such as AWS, SAP, Google and Deloitte. It is an ecosystem designed not just to fund startups but to shape them.

“We realised we were already doing a lot of hands-on work with founders. So, we brought that support to the wider ecosystem,” said Vashistha. In essence, the VC player has introduced a high-touch, founder-first approach for investing early, supporting deeply and building companies that last.

Today, its accelerator spans four distinct initiatives, all aligned with the themes of inclusion, innovation and scalability. Here is a quick look.

StrongHer AWE is a six-month hybrid accelerator empowering women entrepreneurs in India and the US. Designed to bridge the prevalent gender gap, the programme helps founders become investment-ready while navigating the challenges of scaling and market access.

The Climate Change Innovators Cohort (CCIC) is a dynamic programme that supports 15 startups tackling the climate crisis through scalable, innovative solutions. Its focus — helping mission-driven founders move from pilot to proof-of-impact faster.

Arise Connect 1, the biggest initiative of its kind in India, is dedicated to women-led and women-focused pre-seed startups in fintech, healthcare, consumer tech, Web3 and the future of work. It is part of a growing effort to create a more equitable startup landscape during the initial stages of formation.

Arise Connect 2 is the global extension of its accelerator programme, targeting high-impact, early stage startups across various sectors, including fintech, healthtech, consumer tech, HRtech, agritech, edtech, Web3, deeptech, mobility and climate. Building on the momentum of its first edition, this cohort brings together visionary founders from around the world.

The Big Concern For Arise Ventures: AIwashing

Greenwashing is deceptive, as enterprises or even governments often exaggerate their commitment to environmental sustainability or make unsubstantiated claims about their achievements. However, Vashistha pointed out a growing concern across the startup ecosystem, which she called AIwashing. It means startups positioning themselves as AI-first businesses despite minimal use of artificial intelligence or leveraging generic, plug-and-play models.

“You can’t just add a chatbot and call yourself an AI company. That’s the baseline now,” she said. “That’s why we look at how deeply AI is embedded in a product and whether the model ‘learns and improves’ with continued use.”

The founder cited VELMENI to elaborate on how core AI companies stand out from the rest. Based in Sunnyvale (California), the AI-driven dental care platform analyses and annotates dental X-rays, flags potential issues and recommends procedures alongside insurance billing codes/categories. Currently deployed in clinics across the US, the system continuously learns from medical imaging data, thereby improving diagnostic accuracy over time.

Again, Streamingo.ai, a video analysis platform, uses computer vision, natural language processing and speech signal analysis to decipher unstructured multimedia data. Both Procter & Gamble and ESPN use this technology to understand how consumers engage with products and content. These insights, derived from real-time data, enable more informed decision-making across marketing and operations.

These portfolio companies have paved the path for a broader investment thesis. Arise supports startups where AI is not a bolt-on feature but the foundation of intellectual property. The VC firm’s evaluation goes beyond product capabilities. It also considers infrastructure, proprietary data pipelines and the depth of algorithmic design.

Do AI Startups From India Meet Global Expectations?

“We look deeper when we assess and evaluate startups for funding and handholding,” asserted Vashistha. “It is because we want to know if they are using AI to create something impactful. The technology should already be integrated across industries. What matters now is how we are applying AI to solve unique problems.”

Vashistha believes Indian entrepreneurs excel at developing AI-driven applications, particularly those designed for specific use cases across the consumer, enterprise and fintech sectors. Still, there is a critical gap in the Indian ecosystem in terms of deeptech infrastructure and institutional support, which are essential for fostering foundational innovation.

Vashistha defines foundational innovation as the development of core technologies and platforms, ranging from proprietary AI models to scalable data infrastructure and advanced computing, which form the underlying bedrock of long-term technological progress. Understandably, foundational innovation will require in-depth and original research, algorithm development and seamless integration of hardware and software.

In stark contrast, applied innovations utilise existing tools to develop products and services tailored for end users.

According to Vashistha, coping with the next wave of global competitiveness will depend on strategic investments, skilled talent and proactive policies that catalyse innovation at the infrastructure and model-building level. “We still don’t have the kind of enterprise capital, cloud access, or institutional R&D support that the Bay Area startups can access,” she rued.

Interestingly, strategic investments by global and local enterprises are common in the US. However, India still lags in this respect. Of course, early stage founders in the country benefit from public programmes and cloud credits. But the scope for large-scale corporate partnerships and corporate venture capital remains limited.

Even then, venture firms like Arise have observed a notable shift. Indian entrepreneurs are adapting swiftly. Take, for instance, the growth of vertical SaaS across agritech, BFSI (banking, financial services and insurance), logistics and governance. Startups in these sectors are developing highly specialised AI tools for practical, real-world applications.

These tools are designed to address domain-specific challenges such as citizen service delivery, municipal operations, digital identity management, regulatory compliance, or public infrastructure monitoring.

In the context of governance, vertical SaaS refers to software solutions purpose-built for public sector organisations, civic bodies and regulatory agencies. These platforms are engineered to tackle domain-specific challenges, ranging from citizen service delivery and panchayat/municipal operations to digital identity systems, compliance workflows, infrastructure monitoring and more.

Startups developing vertical SaaS solutions for governance increasingly work at the intersection of technology and public administration, creating AI-enabled platforms that automate grievance redressal, enable predictive maintenance of civic infrastructure, monitor welfare schemes and boost data-centric policymaking.

Unlike horizontal SaaS models, which offer general-purpose solutions across various industries, vertical SaaS in the governance space handles complex and critical workflows. As India strives to adopt a minimal government and maximum governance approach, these AI-driven services may see a huge growth opportunity and play a pivotal role in shaping a digital-first compliance ecosystem.

As India’s venture capital ecosystem matures, funds like Arise Ventures offer a glimpse into what the next chapter could look like: Purpose-led investing that doesn’t compromise on returns and diversity-driven portfolios that prove commercial viability.

It also aligns with the evolving strategy of the VC fund. “We are moving away from broad, generalised platforms,” said Vashistha. “Instead, we are focusing on highly targeted, narrow AI applications that deliver measurable outcomes. Supporting deep technical expertise to build something genuinely useful, where there’s a clear market need, is far more compelling than simply vying for the next deal.”

For her, the journey from a PE deep dive to Saha Fund and Arise Ventures is not just about repositioning capital or finding potential startups. It is about tracking where and how change begins. It is a model that enables IP-led companies with global ambitions to gain significant traction to lead the next wave. It is also a recognition that early stage capital, when paired with hands-on support, makes the biggest difference by blending impact with performance.

[Edited by Sanghamitra Mandal]

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