AI x India: The Next Frontier for Consumer Tech?

☕🗞️ Good morning! Welcome to The Brief

Silicon Valley venture capitalist Mary Meeker released her iconic trends report this week after a six-year hiatus and, no surprise, it’s all about artificial intelligence (AI). As ChatGPT, DeepSeek and their ilk pervade our lives, India is going through its own journey with respect to AI innovation. Not quite there yet but India has surprised the world before and we’ll just have to wait and see how this phase of technological disruption plays out here over time.

Before we dive in, a quick introduction to who we are.

Lightbox is a Mumbai-born venture capital firm focused on technology-led consumer businesses. Over the past decade we’ve employed a concentrated portfolio construction and deep operational engagement to enable our portfolio companies and limited partners to navigate this market.

India is moving steadily towards becoming a $10 trillion economy, driven by rising consumption and digital adoption. We believe we are uniquely positioned to offer a front-row seat to the most important shifts in the country’s consumer markets. If you’re a global capital allocator, family office, UHNI, or strategic investor looking to participate in the India opportunity—this newsletter is for you.

In this edition:
Cues for investors from Mary Meeker’s ‘Trends — Artificial Intelligence’ report, signals for India’s fragmented, mobile-first market and, whether AI will be a game changer—if done capital-efficiently. Plus, the most important developments from India’s vibrant consumer technology markets. 

Let’s get into it.

📡 Signals

🧑‍💻 AI Will Reinvent Every Consumer Experience

AI platforms launched today can instantly serve global markets, a stark contrast to previous technology waves that spread gradually. AI tools are being adopted globally at record pace demonstrated by ChatGPT’s first 100 million users within the first two months of its launch. Netflix took a decade to touch that milestone. By April 2025, ChatGPT boasted 800 million weekly users— faster than TikTok which took nine months to hit its first 100 million users. 

Where does AI’s high-growth potential lie? The 340-page trends report from Meeker offers some insights.

• Meeker draws special emphasis towards generative AI-platforms that are fulfilling the creative needs of users. The implosion of the number of AI writing assistants and art generators in the recent past have shown how users will flock to platforms that make content creation a seamless experience for a growing number of people. 

• She also predicts the growing adoption of verticalised AI platforms highlighting how every customer experience will be reinvented by AI. It will leave no stone unturned when it comes to casting its shadow on niche consumer verticals like fitness, education, travel, and even dating. And so investors must seek startups that apply AI to specific problems.

•  The cue to investors is to fund startups that are building user-friendly interfaces on top of LLMs specialising in niche content domains.

•  She drives potential investor interest across strategic use of AI across retail and e-commerce (virtual shopping assistance or itinerary generators) also throwing gaming & metaverse in the mix with the report noting the rise of immersive experiences through investments in AR/VR platforms leveraging procedural AI. 

Major risks with AI adoption:

• Compute cost and burn rate: Many AI companies are not yet profitable and burn cash on compute costs. A downturn or slower monetisation could hurt startups. Investors should ensure startups have a clear plan to lower costs (model pruning, custom hardware) and to monetize quickly.

• Geopolitical fragmentation: With the US and China decoupled, startups risk losing access to the latest technology driving AI innovation. The US has implemented export bans on advanced chips and AI-hardware to China (NVIDIA’s high-end GPUs). China, on the other hand, is promoting domestic software stacks and app stores with less reliance on US cloud providers and open-source models. 

• Energy and environmental limits: The soaring power of AI-infrastructure may become unsustainable or attract regulation. If data centre energy use hits limits, this could slow the pace of roll-out for consumer services relying on the cloud.

  This week we’re talking about:

  • Some of the low-hanging use cases for AI in consumer businesses.

  • The differentiating role AI can play in India’s fragmented market.

  • How Lightbox and portfolio companies are using AI to up operational efficiencies.

📰 Headlines

Bessemer Sharpens AI Focus; Zepto Defers IPO

Bessemer onboards Cisco executive for AI, enterprise tech bets

In a nod to emerging AI opportunities in India, Bessemer Venture Partners has named Cisco executive Pankaj Mitra as a partner with the mandate of overseeing investments in AI, cybersecurity and enterprise technology. At Cisco, Mitra led the company’s corporate development team and notable investments he led include Whatfix, Uniphore and Fiddler. Bessemer raised a $350 million second India fund earlier this year.

DailyHunt parent under scrutiny for transactions with Builder.ai

VerSe Innovation, the parent company of news aggregator app DailyHunt, is under the scanner for allegedly colluding with bankruptcy-bound Builder.ai to fabricate business transactions and provide inflated sales numbers to investors, says a Bloomberg report. The alleged transactions date back four years and amount to $60 million for services such as app development and marketing. 

VerSe co-founder Umang Bedi dismissed the allegations as baseless. “VerSe has paid $80 million to Builder.ai for services including hyperscale cloud deployment, system migration and custom software solutions. In return, Builder.ai paid $53 million to VerSe for advertising services,” Bedi told Moneycontrol.

Incidentally, about a month ago, audit firm Deloitte had flagged concerns with VerSe’s internal controls with respect to purchase orders, invoices and payments. VerSe’s investors include Goldman Sachs, Google, CPPIB and it was last valued at $5 billion.

Zepto defers IPO to 2026 

Quick commerce company Zepto has deferred its IPO plans to 2026, according to a Moneycontrol report. The company wants to focus on bringing down cash burn and improving profitability metrics before tapping the public markets, the report said. Zepto is locked in fierce competition with Eternal’s Blinkit and Swiggy’s Instamart, both of whom operate with significantly lower cost structures, according to reports. The company is looking to raise $800 million in its proposed IPO and is also in talks to raise $700 million in the interim from its existing investors which include Avenir Growth and General Catalyst.

Stable Money raises Series B

Stable Money, a fintech focused on fixed income investments, has raised $20 million in a Series B round, which follows a $15 million Series A round last year. Fundamentum Partnership and Aditya Birla Ventures led the Series B. Z47, RTP Global and Lightspeed were return backers in the round. Founded in 2022, the company started with digital fixed deposit investments and expanded to offering bonds. It plans to soon launch pilots for debt mutual funds, arbitrage funds and gold mutual funds. The company claims an AUM of over Rs 3,000 crore and 20 lakh-plus customers.

Udaan closes Series G round at flat valuation

B2B ecommerce company Udaan has raised $114 million in  its Series G round led by return backers M&G Investments and Lightspeed. The capital will be deployed to deepen its category presence on the platform to FMCG, restaurants and catering from electronics, home, lifestyle and pharma. It will also accelerate its private label brands in the staples category. According to reports, the latest round has closed at a flat valuation. Udaan last fetched a valuation of $1.8 billion in 2023, which was a steep decline from its peak valuation of $3.2 billion in 2021.

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