Meta Report: More Than 70% of Indian Startups Using AI in Core Business Functions

A groundbreaking report by Meta and Alvarez & Marsal unveils a remarkable shift in the Indian startup landscape, revealing that over 70% of these innovative companies are now harnessing the power of artificial intelligence (AI) across their core business functions.

This strategic adoption of AI is not just a trend; it’s a transformative force reshaping the essence of Indian startups. With a focus on omnichannel strategies, expansion into tier 2 and tier 3 markets, and a drive for global outreach, these startups are redefining their growth trajectories. 

In particular, the healthcare and edtech sectors stand as pioneers, leading the charge in AI-driven innovation and operational efficiency. The report highlights that an impressive 67% of startups have embraced omnichannel models, revolutionizing customer journeys that seamlessly connect online exploration with offline purchasing.

As India’s startup ecosystem surges into its next exhilarating growth phase, these emerging enterprises are setting the stage for a digital renaissance. By leveraging AI, omnichannel approaches, and unlocking access to tier 2 and tier 3 markets, they are not only enhancing their local presence but are also boldly venturing into international territories. 

The findings underscore how the Indian startup ecosystem has flourished over the last decade, characterized by a significant uptick in early-stage funding, increased digital engagement, and rising consumer affluence across both metro and non-metro regions.

“In today’s fast-paced and ever-evolving landscape, startups that think innovatively and act decisively will lead the way forward,” said Sandhya Devanathan, Vice President of India and South East Asia at Meta. 

“We take immense pride in partnering with these trailblazers, equipping them with state-of-the-art AI-powered tools that allow them to scale their visions into impactful realities.”

AI is proving to be a game-changer in the realm of marketing. The report reveals that among marketers, a stunning 87% of AI adopters have experienced a remarkable 30% improvement in their cost per acquisition (CPA).

Leading sectors such as healthcare, edtech, and beauty are embracing AI with maturity, employing automation for superior customer service, predictive analytics, and personalized experiences. 

The once-overlooked tier 2 and tier 3 markets are now thriving battlegrounds for growth. Nearly all surveyed startups are seizing the opportunity to expand into these regions, driven by surging demand, enhanced digital access, and streamlined distribution channels. 

Notably, service-based startups are entering these markets nearly a year ahead of their product-based counterparts, utilizing WhatsApp, vernacular content, and regional influencers to forge strong connections.

Going global is no longer the exclusive domain of established players. The study reveals that an impressive 52% of startups are now boldly expanding their horizons across borders, motivated by the potential of larger total addressable markets (TAM) and a growing global appetite for Indian-origin products. 

The United States, the UAE, and the UK stand out as the top export markets, signaling a vibrant future for these ambitious startups.