How to Get Funding for AI Startups in India

Artificial Intelligence (AI) is shaping the future from automation tools to smart chatbots, every sector now needs AI solutions. But turning your AI idea into a real business requires strong financial support. This is where Funding for AI Startups becomes the key to success.

In this blog, we’ll explain step-by-step how to get funding for AI startups, government schemes available, documents required, and how StartupFlora can help you secure the right funding or grant all in one place.

The global artificial intelligence (AI) industry continues to grow at an explosive rate in 2025, transforming major business sectors and presenting unique investment opportunities. Current estimates place the global AI market valuation between $294 billion and $638 billion, with projections to exceed $1.77 trillion-$3.68 trillion by 2032-2034, at a compound annual growth rate (CAGR) ranging from 19% to 29%. Top AI companies including Google, Microsoft, NVIDIA, OpenAI, Apple, Anthropic, and xAI—are driving innovation and setting the pace for sector competition and adoption

How I Get Funding for AI Startups?

If you are building an AI service-based business — like AI-driven chat systems, analytics software, or computer vision tools — you can apply for funding through these major sources:

1. Government Schemes for AI Startups
   India’s government is encouraging AI innovation through various programs such as MeitY’s GENESIS, iCreate Grants, and Startup India Seed Fund.
2. Private Investors and Venture Capital
   Companies like Lightspeed, Prosus Ventures, and Together Fund are investing heavily in AI-based startups in India.
3. Bank & NBFC Loans
   Many Indian banks now offer startup-focused business loans that can fund your working capital, software infrastructure, and R&D.
4. Angel Investors & Incubators
   Platforms like iCreate, T-Hub, and CIE-IIIT Hyderabad support early AI founders with seed grants and mentorship.
5. Platforms like StartupFlora
   If you’re not sure where to begin, StartupFlora connects your startup with the right funding option whether it’s a loan, grant, or investor all through one verified network.

Government Schemes for Funding AI Startups

Here are the top AI startup funding schemes in India (2025) you should explore:

1. GENESIS Program (MeitY)

The GENESIS (Gen-Next Support for Innovative Startups) program by MeitY offers up to ₹10 lakh in grants for early-stage tech startups, including AI ventures. It helps entrepreneurs with R&D, product design, and market validation.

Who can apply: AI startups registered under DPIIT, working on innovative tech-based solutions.
Benefit: Non-refundable grant of ₹10 lakh and mentorship from government-recognized incubators.

2. iCreate Scheme (Innovation Center for Entrepreneurship)

The iCreate Scheme is India’s leading startup incubator based in Gujarat. It provides up to ₹50 lakh in funding for deep-tech and AI-based startups.

Example:
NUMBER7 AI, founded by Vishal Rajput and Naveen George, received a ₹50 lakh grant from the iCreate scheme with StartupFlora’s guidance. Their AI-driven innovation earned recognition and strong financial backing to grow faster.

3. Startup India Seed Fund Scheme (SISFS)

This scheme supports startups in sectors like AI, IoT, and Machine Learning with seed funding up to ₹20 lakh for development and ₹50 lakh for market entry.

Eligibility:

• Startup should be recognized by DPIIT.
• Must have an innovative prototype.
• Should be less than 2 years old.

4. SIDBI Fund of Funds

The Small Industries Development Bank of India (SIDBI) manages this fund to support venture funds that invest in AI, robotics, and deep tech startups.

How it helps: Instead of direct funding, SIDBI invests through VC firms, which then invest in AI startups like yours.

5. NIDHI-EIR and PRISM

Programs like NIDHI-EIR (DST) and PRISM offer small grants to innovators working on early-stage AI solutions ideal for solo founders and college-based startups.

What Documents Are Required for Funding for AI Startups?

Before applying for any scheme or loan, make sure you have these documents ready:

1. Startup India / DPIIT Certificate
2. Company Incorporation Certificate (MCA)
3. Business Plan / Project Report
4. PAN, GST, and Bank Account Details
5. KYC Documents (Directors/Founders)
6. Pitch Deck or Prototype Details
7. Financial Projections (2–3 years)
8. Credit/Experian Score Report (for loan-based funding)

Having these ready makes your application fast and credible.

New Schemes for Funding AI Startups (2025)

India is making AI a national priority. In 2025, new policies and schemes have emerged:

• IndiaAI Mission – A national program under MeitY that provides grants and R&D funding for AI startups building ethical, responsible AI tools.
• Digital India FutureLABS – A new initiative for startups building hardware + AI solutions (e.g., robotics, smart sensors).
• AI for MSME Scheme (Proposed) – Offers subsidized credit for MSMEs adopting AI tools in their operations.

These programs are expected to create more pathways for AI founders to access government-backed capital in the coming year.

Grants and Non-Refundable Grants for AI Startups

The best part about government AI startup schemes is that most of them are non-refundable meaning, you don’t have to return the money.

For example:

• GENESIS Scheme: ₹10 lakh non-refundable grant.
• iCreate Scheme: ₹50 lakh milestone-based grant.
• Startup India Seed Fund: ₹20–₹50 lakh seed funding for prototype and scaling.

These funds help founders test ideas, build MVPs, and enter the market without financial stress.

How StartupFlora Helps You Get Funding for AI Startups

StartupFlora simplifies the entire process of getting funding or grants for your AI startup — all through one platform.

Here’s how the process works:

1. Information Check:
   First, we collect your startup’s details, financial data, and credit/Experian score.
2. Funding Match:
   Our system then compares your profile with over 50+ Government, Private, Semi-Government, Urban Co-operative Banks, and NBFCs.
3. Best Offer Selection:
   You get a customized funding option — whether it’s a government grant, startup loan, or investor-backed fund.
4. Support in Application:
   StartupFlora’s experts help you prepare project reports, upload documents, and apply through the right channel.
5. Approval & Disbursement:
   Once verified, your loan or grant is approved. You receive funds directly in your business account — without running from pillar to post.

StartupFlora acts as a single trusted window helping AI-based businesses, Hotel & Tourism ventures, and tech MSMEs get funding faster and safer.

From working capital to machinery loans, angel investor connections to invoice discounting, StartupFlora has tie-ups with top funding agencies across India.

Recent Success Story AI Startup Funding in India

1. Emergent AI – Global Expansion Backed by $23 Million

Emergent AI, a fast-growing tech startup, raised $23 million in Series A funding led by Lightspeed Ventures, with participation from Together Fund, Y Combinator, and Prosus Ventures.
Even Google’s Chief Scientist Jeff Dean joined as an angel investor. With total funding of $30 million, the company expanded globally with a new hub in Palo Alto.

2. Number7 AI – ₹50 Lakh Grant via iCreate Scheme

NUMBER7 AI, led by Vishal Rajput and Naveen George, received ₹50 lakh grant funding through the iCreate scheme.
With support from StartupFlora, the team refined their product, built a scalable AI solution, and achieved one of India’s biggest AI grant milestones.

FAQ: Common Questions About Funding for AI Startups

Q1. How can I get government funding for my AI startup?
You can apply for programs like GENESIS, iCreate, and Startup India Seed Fund. These schemes support AI founders with non-refundable grants and mentorship.

Q2. Can I get funding without a prototype?
You can apply for early-stage grants like NIDHI-EIR or PRISM which support innovators in the idea or prototype stage.

Q3. Is StartupFlora’s process for funding safe?
Yes, StartupFlora connects only with verified banks, NBFCs, and government bodies, ensuring transparency and trust in every step.

Q4. Do AI startups qualify for MSME loans?
Yes, if your AI business is registered as a Private Limited or MSME under Udyam Registration, you can get startup or working capital loans.

Q5. How long does it take to get funding approval?
Typically, 10–30 days, depending on whether you apply for a loan or a government grant. StartupFlora helps you fast-track the process.

Final Words for Ai Entrepreneurs

Getting Funding for AI Startups in India is no longer a challenge. With new government programs, growing investor interest, and StartupFlora’s support system — turning your AI innovation into a real business is now easier than ever.

Whether you’re developing AI tools for business automation, customer service, or healthcare, the right funding can help you scale faster.

So, if you’re ready to launch or grow your AI startup, connect with StartupFlora today — your one-stop gateway to India’s best startup funding opportunities.